UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                         ------------------------------
                                  FORM 10-K
        X
       ---   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934

                  For the fiscal year ended June 30, 1999

                                      OR
       ---   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934
                  For the transition period from  to

                          Commission file number 1-483
                         ------------------------------
                                MALLINCKRODT INC.
            (Exact name of registrant as specified in its charter)
                New York                            36-1263901
     (State or other jurisdiction of            (I.R.S. Employer
      incorporation or organization)             Identification No.)

         675 McDonnell Boulevard
           St. Louis, Missouri                         63134
        (Address of principal                       (Zip Code)
         executive offices)
  Registrant's telephone number, including area code: 314-654-2000
                         ------------------------------
      Securities registered pursuant to Section 12(b) of the Act:

                                            Name of each exchange
        Title of each class                  on which registered
        -------------------                 ---------------------
   4% Cumulative Preferred Stock,
   par value $100 per share                 New York Stock Exchange
   Common Stock, par value $1 per share     New York Stock Exchange
                                            Chicago Stock Exchange
                                            Pacific Stock Exchange

  Securities registered pursuant to Section 12(g) of the Act: None
                         ------------------------------
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.  Yes  X     No
           ---    ---

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K ---
                         ------------------------------
Aggregate market value of the voting and non-voting common equity held
by non-affiliates of the registrant computed by reference to the
August 31, 1999 shares outstanding and closing price of the
registrant's common stock: $2,249,243,434

Applicable Only To Corporate Registrants:  Indicate the number of
shares outstanding of each of the registrant's classes of common
stock: 70,151,842 shares as of August 31, 1999.

Documents Incorporated By Reference:  Information required by Items
10, 11, 12 and 13 of Part III is incorporated by reference from pages
2 through 7, and 11; pages 6 and 7, 10 and 11, and 19 through 29;
pages 8 through 10; and page 7, respectively, of the registrant's
definitive Proxy Statement for the Annual Meeting of Stockholders to
be held on October 20, 1999.

<PAGE>

1999 FORM 10-K CONTENTS


Item                                                          Page
----                                                          ----
Part I:
1.  Business..............................................      1
    Introduction..........................................      1
    General Factors Related to the Business...............      2
    International and Economic Risk Factors...............      2
    Operations............................................      3
    Other Actions.........................................      9
    Other Activities......................................      9
2.  Properties............................................     11
3.  Legal Proceedings.....................................     11
4.  Submission of Matters to a Vote of Security Holders...     17
    Executive Officers of the Registrant..................     17

Part II:
5.  Market for Registrant's Common Equity and Related
     Stockholder Matters..................................     19
6.  Selected Financial Data...............................     20
7.  Management's Discussion and Analysis of Financial
     Condition and Results of Operations..................     21
7A. Quantitative and Qualitative Disclosures About
     Market Risk..........................................     31
8.  Financial Statements and Supplementary Data...........     32
9.  Changes in and Disagreements With Accountants
     on Accounting and Financial Disclosure...............     59

Part III:
10. Directors and Executive Officers of the Registrant....     59
11. Executive Compensation................................     59
12. Security Ownership of Certain Beneficial Owners
     and Management.......................................     59
13. Certain Relationships and Related Transactions........     59

Part IV:
14. Exhibits, Financial Statement Schedules, and
     Reports on Form 8-K..................................     59

Signatures................................................     64

<PAGE>

PART I.

ITEM 1.   BUSINESS

Introduction

Company Profile
---------------

Mallinckrodt Inc. (Mallinckrodt or the Company) is a global company
serving selected healthcare markets with products used primarily for
respiratory care, diagnostic imaging and pain relief.

The Company was incorporated in New York in 1909 under the name
International Agricultural Corporation.  The corporate headquarters is
located at 675 McDonnell Boulevard, St. Louis, Missouri 63134, and the
telephone number is (314) 654-2000.

Transformation of the Company
-----------------------------

During the past several years, many significant steps have been taken
to transform the composition of the Company.  During the past three
years, the transformation has involved the following:

     -  On October 16, 1996, the shareholders approved changing the
        Company's name from Mallinckrodt Group Inc. to Mallinckrodt
        Inc.

     -  On March 31, 1997, the Company disposed of Fries & Fries,
        Inc., a wholly owned subsidiary which owned the Company's 50
        percent interest in Tastemaker, which was the flavors joint
        venture.  The transaction generated a net value to the Company
        of $550 million.

     -  On June 30, 1997, the Company sold the animal health segment
        for $405 million cash.  The Company retained certain
        liabilities.

     -  On August 28, 1997, the Company acquired Nellcor Puritan
        Bennett Incorporated (Nellcor) through an agreement to
        purchase for cash all of the outstanding shares of common
        stock of Nellcor for $28.50 per share.  The aggregate purchase
        price of the Nellcor acquisition was approximately $1.9
        billion.  Nellcor is the worldwide market leader in providing
        products that monitor, diagnose and treat respiratory impaired
        patients.

     -  During 1998, the Company sold, or committed to sell, its
        catalysts and chemical additives and Aero Systems divisions.
        These transactions generated cash proceeds of $305 million in
        1998 and $56 million in 1999.

Other recent acquisitions, divestitures and continuing investments in
each of Mallinckrodt's businesses are described in the discussions of
the business segments in Management's Discussion and Analysis of
Financial Condition and Results of Operations in Item 7, and Note 2 of
the Notes to Consolidated Financial Statements in Item 8.

-----------------------------------------
CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995:  Our discussion and analysis in this annual report
contain some forward-looking statements.  Forward-looking statements
do not relate strictly to historical or current facts, but rather give
our current expectations or forecasts of future events.  Forward-
looking statements may be identified by their use of words such as
"plans," "expects," "will," "anticipates," "believes," and other words
of similar meaning.  Such statements may address, among other things,
the Company's strategy for growth, product development, regulatory
approvals, the outcome of contingencies such as legal proceedings,
market position, expenditures, and financial results.

Forward-looking statements are based on current expectations of future
events.  Such statements involve risks and uncertainties and actual
results could differ materially from those discussed.  Among the
factors that could cause actual results to differ materially from
those projected in any such forward-looking statements are as follows:
the effect of business and economic conditions; the impact of
competitive products and continued pressure on prices realized by the
Company for its products; constraints on supplies of raw materials
used in manufacturing certain of the Company's products; capacity
constraints limiting the production of certain products; difficulties
or delays in the development, production, testing, and marketing of
products; difficulties or delays in receiving required governmental or
regulatory approvals; market acceptance issues, including the failure
of products to generate anticipated sales levels; difficulties in
rationalizing acquired businesses and in realizing related cost
savings and other benefits; the effects of and changes in trade,
monetary, and fiscal policies, laws, and regulations; foreign exchange
rates and fluctuations in those rates; the costs and effects of legal
and administrative proceedings, including environmental proceedings
and patent disputes involving the Company; difficulties or delays in
addressing "Year 2000" problems (as discussed in Item 7, Management's
Discussion and Analysis of Financial Condition and Results of
Operations); and the risk factors reported from time to time in the
Company's SEC reports.  The Company undertakes no obligation to update
any forward-looking statements as a result of future events or
developments.

<PAGE>

General Points
--------------

In this report:

Mallinckrodt Inc. and its subsidiaries, collectively, are called the
"Company" or "Mallinckrodt," unless otherwise indicated by the
context.  The Company has three business segments - Respiratory,
Imaging and Pharmaceuticals.

The term "operating earnings" represents revenues less all operating
expenses.  Operating expenses of a business segment do not include
interest expense, corporate income or expense, and taxes on income.

All references to years are to fiscal years ended June 30 unless
otherwise stated.

Registered and common law trademarks are indicated by an asterisk (*).

GENERAL FACTORS RELATED TO THE BUSINESS

Results from operations and related working capital requirements for
Mallinckrodt's Respiratory and Pharmaceuticals business segments are
materially affected by seasonal factors primarily related to the
common cold and influenza season.  These seasonal factors tend to
favorably affect sales and earnings of ventilators and pulse oximetry
products (Respiratory), bulk and dosage narcotics, and acetaminophen
(Pharmaceuticals) primarily in the third and fourth quarters.

Mallinckrodt's business segments generally do not extend long-term
credit to customers.  The Company does, however, periodically
facilitate leasing arrangements through unaffiliated companies for the
financing of medical equipment sales to hospital and alternate care
customers.  In certain instances, the Company provides limited
recourse to the unaffiliated company in the event of customer default;
however, the total potential liability from the recourse is immaterial
to the Company as a whole.  The Company believes this credit policy,
as well as its working capital requirements, do not materially differ
from those of its competitors.

Competition with manufacturers and suppliers in Mallinckrodt's
business segments involves price, service, quality and technological
innovation.  Competition is strong in all markets served.

The Company's operations are subject to significant U.S. and
international regulation related to the safety and efficacy of human
medical devices and pharmaceutical products, the control and safety of
radiopharmaceutical and controlled substances, and the environmental
impact of the manufacture, storage and distribution of the Company's
products.

Financial information about the business segments is in Item 7,
Management's Discussion and Analysis of Financial Condition and
Results of Operations, and in Item 8, Financial Statements and
Supplementary Data.  Financial information about foreign and domestic
operations is included in Note 18 of the Notes to Consolidated
Financial Statements in Item 8.

INTERNATIONAL AND ECONOMIC RISK FACTORS

The Company operates globally, with manufacturing and distribution
facilities in various countries, and is subject to certain
opportunities and risks, including foreign currency fluctuations and
government actions.  Various operational initiatives are employed to
help manage business risks.  In the ordinary course of business,
Mallinckrodt purchases materials and sells finished products
denominated in approximately 25 different currencies.  The Company is
primarily exposed to changes in exchange rates of the German deutsche
mark and other Euro currencies, the Japanese yen and the Australian
dollar.  Overall, the Company is a net beneficiary when the U.S.
dollar weakens and is adversely affected by a stronger U.S. dollar
relative to the major currencies identified.  To minimize exposures to
foreign currency exchange rates, which occur in the ordinary course of
business, the Company purchases currency options.

The Company's interest income and expense are most sensitive to
changes in the general level of U.S. interest rates.  In this regard,
changes in U.S. interest rates affect the interest earned on the
Company's cash equivalents and short-term investments as well as
interest paid on its short-term debt.  To manage the interest rate
characteristics of its outstanding debt to a more desirable fixed or
variable rate basis or to limit the Company's exposure to rising
interest rates, the Company periodically enters into interest rate
swaps and option contracts.

For more information on the Company's risk management strategy, see
Item 7, Management's Discussion and Analysis of Financial Condition
and Results of Operations, and Item 8, Financial Statements and
Supplementary Data.

The Company does not consider the present overall rate of inflation to
have a significant impact on the businesses in which it operates;
however, general sales price declines in hospital and alternate care
products on a global basis due to healthcare cost containment have had
a negative effect on operating results, and this trend is expected to
continue.

While future economic events cannot be predicted, the Company believes
its current operations and future expansion plans will not result in a
significantly different risk profile.

Mallinckrodt's sales to customers outside the U.S. represented
approximately 32, 33 and 36 percent of consolidated net sales in 1999,
1998 and 1997, respectively.  Products are manufactured and marketed
through a variety of subsidiaries and affiliates around the world.
For additional information, see discussions of individual business
segments included below; under Item 7, Management's Discussion and
Analysis of Financial Condition and Results of Operations; and in Item
8, Note 18 of the Notes to Consolidated Financial Statements.

OPERATIONS

The Company manufactures and distributes advanced innovative products
for acute and chronic respiratory care, imaging products for disease
diagnosis, and pharmaceutical products used in pain management.
Principal products include pulse oximetry monitors and sensors which
provide non-invasive monitoring of pulse rate and oxygen saturation,
x-ray contrast media used in radiology and cardiology procedures,
radiopharmaceuticals used in diagnostic nuclear medicine procedures,
critical care and portable ventilators, home oxygen therapy products,
airway management and other critical care devices, acetaminophen and
bulk and dosage narcotics used in pain management, and laboratory and
microelectronic chemicals.

The Company is comprised of three business segments - Respiratory,
Imaging and Pharmaceuticals.

Net sales by segment were (in millions):

                                        1999       1998       1997
                                       -------    -------    -------
     Respiratory...................    $1,144     $  991     $  321
     Imaging.......................       776        760        802
     Pharmaceuticals...............       661        616        575
                                       -------    -------    -------
                                       $2,581     $2,367     $1,698
                                       =======    =======    =======

On August 28, 1997, the Company acquired Nellcor through an agreement
to purchase for cash all of the outstanding shares of common stock of
Nellcor for $28.50 per share.  The aggregate purchase price of the
Nellcor acquisition was approximately $1.9 billion.  The combination
of Nellcor and Mallinckrodt's critical care division, which together
comprise the Respiratory segment of the Company, created the worldwide
market leader in providing products that monitor, diagnose and treat
respiratory impaired patients.  Product lines include pulse oximetry
monitors and sensors, critical care and portable ventilators, home
oxygen therapy products, sleep apnea diagnostic and therapy products,
and medical gases.

The acquisition was accounted for under the purchase method of
accounting and, accordingly, the results of operations of Nellcor have
been included in the Company's consolidated financial statements since
September 1, 1997.  The purchase price of the acquisition was
allocated to the assets acquired and liabilities assumed based upon
generally accepted accounting principles and estimated fair values at
the date of acquisition.  The excess of the purchase price over the
fair value of the net identifiable assets, totaling $814.2 million,
was allocated to goodwill and is being amortized on a straight-line
basis over 30 years.

The Company's products are instrumental in the delivery of healthcare
services and are sold to hospital and alternate care sites, clinical
laboratories, pharmaceutical manufacturers and other customers on a
worldwide basis.  Healthcare products are influenced by a high degree
of innovation and technology, by regulation from agencies such as the
U.S. Food and Drug Administration (FDA), industry standards and by
markets served.  They are significantly affected by conditions within
the healthcare industry, including continuing legislative initiatives
and public and private healthcare insurance and reimbursement
programs.  An aging population and demand for technologically superior
products to extend and improve the quality of life are two major
factors fueling growth within the industry.

The healthcare industry is experiencing extensive change.  All markets
served by the Company are highly competitive in the United States and
overseas.  Legislative bodies, in all likelihood, will continue to
review and assess alternative healthcare delivery systems and payment
methodologies, and ongoing public debate of these issues can be
expected.  Cost containment initiatives, market pressures and proposed
changes in applicable laws and regulations may significantly affect
pricing or demand for medical products, the relative costs associated
with doing business, and the amount of reimbursement by both
government and third-party payors.  In particular, the industry is
experiencing market-driven reforms from forces within the industry
that are exerting pressure on healthcare providers and product
manufacturers to reduce healthcare costs.  These market-driven reforms
are resulting in industry-wide consolidation that is expected to
increase the downward pressure on healthcare product margins, as
larger buyer and supplier groups exert pricing pressure on providers
of medical devices and other healthcare products.  Managed care and
other healthcare provider organizations have grown substantially in
terms of the percentage of the population in the United States that
receives medical benefits through such organizations and in terms of
the influence and control that they are able to exert over an
increasingly large portion of the healthcare industry.  These
organizations are continuing to consolidate and grow, which may
increase the ability of the organizations to influence the practices
and pricing involved in the purchase of medical products, including
those products sold by the Company.  Both cost containment and
regulatory reform may have an adverse impact on the Company's results
of operations.

The demand for price reductions from healthcare customer buying groups
continued throughout 1999.  This trend, which is expected to continue,
had its most significant impact on the Company's Imaging segment,
where the potential for generic competitive products and available
manufacturing capacity continue to lower prices.  In response to this
market trend, in 1996, the Company entered into a multi-year
agreement, with prices subject to periodic renegotiation, with Premier
Purchasing Partners, L.P. (Premier), the largest healthcare purchasing
group in the United States.  Effective July 1, 1997, Premier named
Mallinckrodt a corporate partner and, accordingly, Premier's 1,800
hospital and healthcare facilities are provided incentives to use
Mallinckrodt products.  Effective July 1, 1999, the corporate
partnership agreement was extended two years through December 31,
2006, and the agreement now includes almost all Respiratory and
Imaging segment products.  For 1999, 1998 and 1997, net sales to
hospital and healthcare facilities under the Premier agreement
represented approximately 13 percent, 13 percent and 9 percent of net
sales, respectively.  No individual customer, either through Premier
or otherwise, represented more than 10 percent of net sales for any of
the three years in the period ended June 30, 1999.

With the acquisition of Nellcor in August 1997, Mallinckrodt is a more
significant supplier to healthcare providers.  Customers will benefit
from the combined companies' expanded product lines and strengthened
position as a full service, single source for hospitals and national
and regional purchasing organizations.

See Item 7, Management's Discussion and Analysis of Financial
Condition and Results of Operations; and Item 8, Note 2 of Notes to
Consolidated Financial Statements for additional information about
business activities.

Respiratory
-----------

The Respiratory segment develops and markets products that help
diagnose, monitor and treat respiratory disorders, wherever patients
receive care.  Nellcor, with its core competency in pulse oximetry,
joined with Puritan-Bennett Corporation, the leader in critical care
ventilation, in 1995.  Mallinckrodt had previously established world
leadership positions in airway management and other critical care
devices.

Today, the Company's product line is the broadest in the industry and
is composed of several businesses - anesthesia and respiratory
devices; oximetry, including monitors and sensors; critical care and
portable ventilators; medical gas; oxygen therapy and asthma
management; sleep diagnostics and therapy; blood analysis products;
and maintenance services.

Anesthesia and respiratory devices include continuous core temperature
monitoring systems, fluid warming and convective warm air temperature
management systems, and endotracheal and tracheostomy tubes.
Continuous core temperature monitoring and temperature management
systems are utilized both in surgical procedures and post-operatively.
The airway management product line consists of basic and specialty
tracheal tubes, a full range of disposables used in hospitals to
connect the airway management products to anesthesia and ventilation
machines, and tracheostomy tubes which are used in hospitals and
alternate site facilities for maintaining airways during respiratory
care.  The Company's endotracheal and tracheostomy tubes are by far
the world market leaders.

Mallinckrodt is the world's foremost manufacturer of oximetry
products, including monitors and sensors.  The Company has built on
its expertise in pulse oximetry to offer a wide range of patient
safety products for clinical assessment in every healthcare setting
and the home.  From simple handheld devices to multiparameter systems,
the Nellcor line offers choice in size, cost and function.  Today,
Mallinckrodt offers the most comprehensive line of adhesive and
reusable sensors for all patient types and applications.  Oximetry
product sales were 14 percent and 12 percent of Mallinckrodt's
consolidated sales for 1999 and 1998, respectively.

The Company's OEM oximetry modules are sold to manufacturers of
multiparameter monitoring systems, which incorporate the Company's
oximetry technology into their own systems.  Mallinckrodt currently
has agreements with 78 OEMs and licensees.  These customers include
medical equipment manufacturers in the United States, Europe, Asia,
Japan and Latin America.

The Company entered into agreements with Hewlett Packard Company (HP)
in 1996 and Corometrics, Inc. in 1995 to incorporate the Company's
fetal oximetry technology into integrated maternal fetal monitors
provided by these leading suppliers.  Both HP and Corometrics, Inc.
are currently selling these integrated monitors outside of the United
States.

During 1999, Mallinckrodt received 510(k) clearance for new oximetry
products, including the NPB-3900* Series Multiparameter Monitors and
the NPB-4000C* Multiparameter Monitor with Color Display.  The latest
addition to the oximetry family, the NPB-395* Pulse Oximeter, is
pending 510(k) clearance.

The Company's fetal pulse oximeter is already approved in Europe and
is in the advanced stages of product registration in the United
States.  It is believed that the N-400* Fetal Oximetry System will
help lower the risks involved in childbirth by reducing unnecessary
cesarean section deliveries.  The Company believes that fetal pulse
oximetry can help clinicians make more informed decisions regarding
the status of a fetus during labor and delivery by providing
information that helps them determine if the fetus is adequately
oxygenated when the heart-rate pattern is non-reassuring.

During 1999, the Company introduced the MP404* Oximetry Module.  With
this module installed, OEM customers can have advanced digital signal
processing designed to tenaciously track patient oxygen status, even
during long periods of patient motion or poor perfusion.  Upgraded
algorithms allow the MP404* to read through signal corruption to
provide accurate patient saturation and pulse values.  This makes the
MP404* ideal for use in monitoring neonatal through adult patients in
a variety of settings.

The critical care and portable ventilators business currently offers
the world's most popular ventilator, the Puritan-Bennett 7200*
ventilator system.  The 7200* Series ventilator system is a critical
care ventilator purchased primarily by hospitals to assist or manage
patient respiration in a variety of acute care settings.  The 7200*
Series ventilator is designed to ease the work of patient breathing
and lessen patient discomfort.

During the fourth quarter of 1998, the Company received marketing
clearance from the FDA to sell its new 840* ventilator, which is
designed to become the world's leading infant-pediatric-adult critical
care ventilator.  During the second quarter of 1998, the Company
received marketing clearance from the FDA to sell its new, state-of-
the-art 740* ventilator.  The low operating and maintenance costs of
the 740* ventilator make it ideal for use in developing countries and
in subacute care facilities.  In December 1998, the Company received
FDA marketing clearance to sell the 760* ventilator.  U.S. sales
commenced in February 1999.

In its portable ventilator product line, the Company released the
Achieva* ventilator to markets outside the U.S. during 1999.  This
next generation portable ventilator adds the pressure support
ventilation modification for improved patient comfort.

The Company's medical gas business involves the filling and
distribution of nitrous oxide and other medical and specialty gases
primarily in high pressure cylinder systems.  The Company is the
largest producer of nitrous oxide in North America with 4 production
units, and distributes this along with other medical and specialty
gases through a nationwide system of 31 branches.  These products are
sold by the Company's dedicated sales force to users of medical gases
in major cities and through distributors in rural areas.

The oxygen therapy and asthma management product family covers the
entire range of oxygen therapy functions, from oxygen concentrators to
portable liquid oxygen and conservation devices.  The Company's
spirometry system measures lung capacity and performance through a
complete line of devices targeted at hospital pulmonologists and
primary care physicians.  In April 1998, the Company received 510(k)
premarket clearance from the FDA for its new spirometry system, the
Simplicity*.  This small, lightweight, handheld system is designed for
primary care physicians.  The Company also markets peak flow meters,
peak flow monitors, and other devices to help patients with asthma or
other forms of chronic obstructive pulmonary disease (COPD) to better
manage their conditions.

Diagnostic and therapeutic sleep products are used in hospital sleep
laboratories to diagnose sleep problems and in a variety of other
settings to monitor and treat sleep disorders.  In sleep therapy, the
Company received 510(k) clearance for the GoodKnight* range of
Continuous Positive Airway Pressure (CPAP) products in July 1998.  In
diagnostic products, the Company released its Windows* version of its
Sandman* polysomnography system.

HemoCue products serve the in vitro blood testing market for blood
hemoglobin and glucose analysis.  These tests are performed in
physician office laboratories, hospitals, public health facilities,
blood banks and diabetes clinics.  HemoCue has divided the U.S. market
into twelve regions, of which nine are covered by regional exclusive
distributors and three by a dedicated direct organization.
Internationally, these products are marketed primarily through
dedicated distributors.

The Company's service programs support customers during all stages of
product ownership and assist healthcare providers in merging the most
appropriate technology with the most cost-effective methods, including
CliniVision*, the market-leading handheld computing tool used in
tracking the care of respiratory impaired patients.

Mallinckrodt's customers had traditionally been physicians and
healthcare professionals in clinical settings such as critical care
units of hospitals.  With the increasing pressure to lower healthcare
costs, more patients are being treated in lower-cost areas in and
outside the hospital.  The Company's products are now purchased for
use throughout the hospital, including intermediate care and step-down
units, labor and delivery rooms, emergency rooms and general care
floors, and are marketed and sold into the alternate site care market,
including surgicenters, subacute care and skilled nursing facilities,
physicians' offices, clinics, ambulatory care settings, and the
growing home market.

The Company's products are sold in the major markets of the world
principally through a direct sales force, assisted by clinical
consultants and specialists, corporate account managers, and
distributors in the U.S. and internationally.

In January 1999, Mallinckrodt acquired Life Design Systems, Inc.
(LDS), a Dallas, Texas-based developer and manufacturer of
resuscitation bags and related accessories.  LDS produces
resuscitation bags with carbon dioxide detection capability in a range
of sizes from infant to adult.  This acquisition was accounted for
under the purchase method of accounting.

During 1999, Mallinckrodt sold Medical Gas Distribution Systems (MGDS)
and Crow River Industries (including its subsidiary company, Mobility
Products and Design).  MGDS sold the medical gas outlets, alarms and
accessories used in the movement of medical gases within hospitals.
During 1997, the Company sold Mallinckrodt Sensor Systems, Inc.  The
financial statements include the results of these businesses prior to
sale; however, the associated earnings and assets were not material to
the Respiratory segment or to Mallinckrodt Inc.

Respiratory manufacturing facilities are located in Angelholm, Sweden;
Argyle, New York; Athlone, Ireland; Carlsbad, California; El Paso,
Texas; Galway, Ireland; Indianapolis, Indiana; Irvine, California;
Johannesburg, South Africa; Juarez, Mexico; Mirandola, Italy; Nancy,
France; Plymouth, Minnesota; St. Charles, Missouri; and Tijuana,
Mexico.  Production units for the manufacture and/or purification of
nitrous oxide are located in Galena, Kansas; Maitland, Canada;
Pensacola, Florida; and Richmond, California.  The Company also
operates 31 branches which transfill and distribute medical gases.
Mallinckrodt owns the Argyle, Athlone, Carlsbad, Galway, Mirandola and
Nancy facilities.  The remainder are leased.  The Argyle, New York
facility is no longer in production and efforts are underway to divest
this facility.

For information about legal activities involving the Respiratory
segment, see the Other Litigation section of Legal Proceedings in Item
3.

Imaging
-------

The Imaging segment includes the manufacture, sale and distribution of
products used in radiology, cardiology and nuclear medicine.

Radiology products include x-ray contrast media (ionic and nonionic),
ultrasound contrast agents, magnetic resonance imaging (MRI) agents,
and catheters for use in diagnosis and therapy.  These products are
marketed in the U.S. principally by a direct sales force.
Internationally, these products are marketed through direct sales
forces and distributors.  On August 20, 1999, the Company sold the
catheter product line and the associated manufacturing facility in
Angleton, Texas.

Cardiology products are directed toward meeting the needs of both
invasive and non-invasive cardiology in diagnosing and treating
diseases of the cardiovascular system.  The business currently offers
both ionic and nonionic contrast agents, ultrasound contrast agents,
and interventional catheters and related supplies.  These products are
sold directly to hospitals, primarily by a dedicated sales
organization within Mallinckrodt's direct sales force.  Radiology and
cardiology x-ray contrast media sales were 16 percent, 18 percent and
28 percent of Mallinckrodt's consolidated sales for 1999, 1998 and
1997, respectively.

Nuclear medicine products consist of radiopharmaceuticals used to
provide images of numerous body organs, anatomy and function, and to
diagnose and treat diseases.  Nuclear medicine products are sold in
the U.S. by a direct sales force and distributed both directly and
through a nationwide network of nuclear pharmacies.  Internationally,
nuclear medicine products are marketed through a direct sales force
and distributors.

Since its introduction in the U.S. ten years ago, Optiray*, a low
osmolar, nonionic x-ray contrast medium, has been widely accepted in
both radiology and cardiology procedures.  Optiray* began to be
introduced outside the U.S. in 1991.  To source growing Optiray*
volumes in the international market, the Company opened a new
production facility in Dublin, Ireland during 1994 for the manufacture
of Optiray* in its bulk drug form.  In addition, capacity expansion
projects at Mallinckrodt's existing plant in St. Louis, Missouri were
completed in 1994 and again in June 1997.  Mallinckrodt has also made
investments at its Dublin facility to launch a new process for the
synthesis of Ioversol, the key component of Optiray*, resulting in
lower costs and improved quality.  This process was started in
February 1998 at the Dublin, Ireland facility and is expected to be
completed at the St. Louis manufacturing site in 2000.

In June 1990, Mallinckrodt introduced Ultraject*, a patented
innovation in x-ray contrast media agent administration.  This
prefilled syringe provides a more efficient, convenient and safer
method of delivering contrast agents.  Ultraject* allows Mallinckrodt
to differentiate its x-ray contrast media offering by providing
advantages over traditional glass bottles and vials because it reduces
handling hazards and the potential for dosage error.  In January 1996,
Mallinckrodt acquired Liebel-Flarsheim Company of Cincinnati, Ohio to
enhance its position in the contrast imaging arena.  Liebel-
Flarsheim's products include x-ray contrast media power injectors for
angiography and CT, x-ray components, and specialized equipment for
diagnostic urology procedures.

In September 1996, Mallinckrodt signed a collaboration agreement with
Epix Medical Inc., formerly known as METASYN, Inc., to co-develop a
blood pool MRI agent.  Mallinckrodt has worldwide manufacturing rights
for the products developed and has selling and marketing rights to
them for all countries, except Japan.  In April 1997, Mallinckrodt
introduced GastroMARK*, an oral GI bowel marker used in MRI
procedures.  This product was licensed from Advanced Magnetics, Inc.
of Cambridge, Massachusetts and is distributed exclusively by
Mallinckrodt in the U.S., Canada, Mexico, Japan, Australia and New
Zealand.

During 1989, Mallinckrodt acquired an equity position of less than two
percent of the then outstanding common shares of Molecular Biosystems,
Inc. (MBI) of San Diego, California, and obtained exclusive marketing
rights in the Western Hemisphere for Albunex*, a new ultrasound
contrast agent.  Albunex* was approved in August 1994 with
Mallinckrodt's launch of the product occurring in the second quarter
of 1995.  On September 7, 1995, Mallinckrodt entered into a new
distribution and investment agreement for Albunex* and OPTISON*
(FS069), a new ultrasound contrast agent in development.  Under the
September 7, 1995 agreement, Mallinckrodt made an additional equity
investment of $13 million in MBI.  In addition, the agreement also
provides for Mallinckrodt to partially fund OPTISON* clinical
development and make various milestone payments.  Mallinckrodt's total
equity position in MBI pursuant to this agreement is under ten percent
of MBI's outstanding and publicly traded common stock.  In December
1996, Mallinckrodt extended the agreement with MBI to exclusively
distribute in Europe, Africa, most of Asia, Australia and New Zealand.
Albunex* received FDA approval in June 1997 for the diagnosis of
fallopian tube patency as part of infertility workup.

On December 31, 1997, OPTISON* received FDA approval.  The product was
launched in the United States on January 2, 1998.  OPTISON*, the first
of the perflourocarbon-containing ultrasound agents to reach the
market, enables physicians to enhance resolution of anatomical
structure where ultrasound alone is inadequate.  The product is
specifically indicated for use in patients with suboptimal
echocardiograms to opacify the left ventricle and to improve the
delineation of the left ventricular endocardial borders.  Ultrasound
cardiac imaging has several advantages over other imaging methods.  It
is minimally invasive, relatively inexpensive and can provide a real-
time image.

OPTISON* helps increase the effectiveness of echocardiography in
diagnosing heart disease by introducing gas-filled microspheres into
the blood.  The microspheres travel in the bloodstream to the left
ventricle of the heart, where the microspheres reflect the sound waves
generated from ultrasound equipment, enabling the development of a
clearer, more diagnostic ultrasound image.

On May 19, 1998, Mallinckrodt announced that OPTISON* had received
final marketing authorization by the European Commission for use in
patients with suspected or known cardiovascular disease.  The
authorization covers all 15 member states of the European Union.
OPTISON* is the only fluorocarbon-based agent approved for use in
Europe.

In April 1999, Mallinckrodt announced it had reached an agreement in
principle with MBI under which MBI would transfer the manufacture of
OPTISON* to the Company, and the Company would assume responsibility
for funding all cardiology, as well as radiology, clinical trials for
OPTISON* in the U.S.  The agreement in principle provided for an
effective date of March 1, 1999.  MBI and the Company are negotiating
a definitive agreement reflecting these, as well as other, terms.

The Company is a party to several legal proceedings in which the
manufacture and sale of OPTISON* is alleged to infringe upon patents
held by the plaintiffs therein.  For additional information about this
litigation, see the Other Litigation section of Legal Proceedings in
Item 3.

In 1995, Mallinckrodt signed an agreement with Medi+Physics to
distribute healthcare proprietary radiopharmaceutical products through
Medi+Physics' radiopharmacies in the U.S. and Canada.  Additionally,
in 1997, Mallinckrodt signed a 5-year co-marketing agreement with
Medi+Physics for Mallinckrodt to market Myoview*, a
radiopharmaceutical cardiac imaging agent, in the U.S.

Imaging manufacturing facilities are located in Cincinnati, Ohio;
Maryland Heights, Missouri; Mexico City, Mexico; Mulhuddart, Ireland;
Petten, the Netherlands; Pointe Claire, Canada; Raleigh, North
Carolina; and St. Louis, Missouri.  Mallinckrodt owns these
facilities.  The Company also operates 40 nuclear pharmacies of which
37 are located in population centers throughout the U.S.

Pharmaceuticals
---------------

The Pharmaceuticals segment's products include analgesics such as
acetaminophen (APAP) used to control pain and fever; codeine salts,
morphine and other opium-based narcotics and synthetic narcotics used
to treat pain and coughs; and peptides which are used in many new
pharmaceuticals.  Other Pharmaceuticals segment products include
laboratory chemicals used in analysis and microelectronic chemicals
used in the semiconductor industry; magnesium stearate for use as a
tableting aid in pharmaceuticals; potassium chloride for use as a
potassium supplement in pharmaceuticals and nutritionals; and other
salts, chemicals and reagents used in the production of pharmaceutical
and food products.

Most Pharmaceuticals products are sold through distributors and by a
direct sales force to the pharmaceutical industry for use in the
manufacture of dosage form drugs.  Narcotic prescription chemicals are
sold directly to pharmaceutical manufacturers, and pharmaceutical
dosage products are sold directly to drug wholesalers and chain
pharmacies, while opiate addiction products are sold primarily to
clinics.  Laboratory chemical products, which include thousands of
high-purity reagent chemicals used in research and development and
analytical laboratories, are sold primarily through distributors to
medical, industrial, educational and governmental laboratories.  A
direct sales force is used to offer microelectronic chemicals and
photoresist strippers to semi-conductor chip producers worldwide.

Mallinckrodt expanded its product offering in healthcare by acquiring
an analgesic pharmaceutical product line from King Pharmaceuticals,
Inc. in 1996.  In November 1996, Mallinckrodt acquired D.M. Graham
Laboratories, Inc. of Hobart, New York.  Graham Laboratories is a
contract manufacturer of both tablet and capsule dosage
pharmaceuticals and a licensed producer of a variety of medicinal
narcotic substances.  The Company expanded its capacity at its St.
Louis, Missouri site to manufacture pharmaceutical intermediates and
additives with the addition of an FDA registered facility in 1997.
The APAP manufacturing at the Raleigh, North Carolina facility has
been incrementally expanded over the past few years, while costs have
been reduced.  Capacity of the Derbyshire, England para-aminophenol
(PAP, a precursor of APAP) manufacturing plant has also been
significantly increased.  Mallinckrodt also upgraded its Compap*
production facility in Greenville, Illinois in 1997.  In addition, the
Company continues to work on several projects to expand and upgrade
the narcotics facility in St. Louis, Missouri to meet growing
worldwide demand.

Pharmaceuticals products are manufactured in Derbyshire, England;
Deventer, the Netherlands; Greenville, Illinois; Hayward, California;
Hobart, New York; Mexico City, Mexico; Paris, Kentucky; Phillipsburg,
New Jersey; Raleigh, North Carolina; St. Louis, Missouri; and
Torrance, California.

OTHER ACTIONS

Discontinued Operations
-----------------------

In 1998, the Company sold or committed to sell the catalysts and
chemical additives and Aero Systems divisions.  Certain liabilities
for environmental, litigation and employee benefits remain with the
Company.  The last portion of the catalysts and chemical additives
division was sold on July 31, 1998.

On June 30, 1997, the Company sold its animal health segment for cash
plus the assumption of certain liabilities.  Certain environmental
liabilities, facility leases and liabilities for employee benefits,
including postretirement benefits, were retained by the Company.

On March 31, 1997, the Company disposed of Fries & Fries, Inc., a
wholly owned subsidiary which owned the Company's 50 percent interest
in Tastemaker, which was the flavors joint venture.

The results of these transactions and the results of operations from
these businesses have been reclassified to discontinued operations,
and prior year results have also been reclassified.  For additional
information about discontinued operations, see Management's Discussion
and Analysis of Financial Condition and Results of Operations in Item
7, and Note 2 of the Notes to Consolidated Financial Statements in
Item 8.

OTHER ACTIVITIES

Research and Development
------------------------

The Company performs applied research directed at development of new
products, development of new uses for existing products, and
improvement of existing products and processes.  Research and
development programs include laboratory research as well as product
development and application.  The Company's development activities are
focused on marketplace needs.  Internal research efforts in each of
its business segments are supplemented with third-party and university
technical agreements.  Research and development expenses, excluding
purchased research and development as a result of the Nellcor
acquisition in 1998, were $152.2 million, $149.0 million and $100.5
million in 1999, 1998 and 1997, respectively.

The Respiratory segment's research and development functions are
individually aligned with each of its business units.  The research
and development functions are housed most frequently near a primary
manufacturing site, which are principally located in Angelholm,
Sweden; Carlsbad, California; Hazelwood, Missouri; Irvine, California;
Mirandola, Italy; Pleasanton, California; Plymouth, Minnesota; and St.
Charles, Missouri.

Research and development activities for the Imaging segment are
performed primarily in Cincinnati, Ohio; Petten, the Netherlands; and
St. Louis, Missouri.  Research and development activities for the
Pharmaceuticals segment are carried on in Phillipsburg, New Jersey;
St. Louis, Missouri; and Torrance, California.  Technical personnel
for process support are located at each manufacturing location.

Patents, Trademarks and Licenses
--------------------------------

Mallinckrodt owns or licenses in excess of 1,550 United States and
foreign patents that expire at various times over the next twenty
years.  Mallinckrodt owns or licenses in excess of 1,950 United States
and foreign trademarks.  The Company also currently has pending
approximately 750 United States and foreign patent applications and
over 300 United States and foreign trademark applications.  No single
patent or trademark is considered to be essential to the Company as a
whole, but in the aggregate, the patents and trademarks are of
material importance to the Company.

Government Regulation
---------------------

Drug and Medical Device Regulation - Most of the Company's businesses
are subject to varying degrees of governmental regulation in the
countries in which operations are conducted, and the general trend is
toward regulation of increasing stringency.  In the United States, the
drug and device industries have long been subject to regulation by
various federal, state and local agencies, primarily as to product
safety, efficacy, advertising and labeling.  The exercise of broad
regulatory powers by the FDA continues to result in increases in the
amounts of testing and documentation required for FDA clearance of new
drugs and devices and a corresponding increase in the expense of
product introduction.  Similar trends toward product and process
regulation are also evident in a number of major countries outside of
the United States, especially in the European Economic Community where
efforts are continuing to harmonize the internal regulatory systems.
In 1997, the Food and Drug Administration Modernization Act was passed
in the United States and was the culmination of a comprehensive
legislative reform effort designed to streamline regulatory procedures
within the FDA and to improve the regulation of drugs and medical
devices. The legislation was principally designed to ensure the timely
availability of safe and effective drugs and medical devices by
expediting the premarket review process for new products.

The regulatory agencies under whose purview the Company operates have
administrative powers that may subject the Company to such actions as
product recalls, seizure of products, and other civil and criminal
sanctions.  In some cases, the Company may deem it advisable to
initiate product recalls voluntarily.

Puritan-Bennett Corporation (Puritan-Bennett), which became a wholly
owned subsidiary of Mallinckrodt as a result of the acquisition of
Nellcor in August 1997, had entered into a consent decree with the FDA
in January 1994, pursuant to which Puritan-Bennett agreed to maintain
systems and procedures complying with the FDA's good manufacturing
practices regulation and medical device reporting regulation in all of
its device manufacturing facilities.  Burton A. Dole, Jr., who
currently serves as the sole director and the sole officer of Puritan-
Bennett, is a party to the consent decree.

Puritan-Bennett has experienced and will continue to experience
incremental operating costs due to ongoing regulatory compliance
requirements and quality assurance programs initiated in part as a
result of the FDA consent decree.  The amount of these incremental
costs currently cannot be completely predicted and will depend upon a
variety of factors, including future changes in statutes and
regulations governing medical device manufacturers, and the manner in
which the FDA continues to enforce and interpret the requirements of
the consent decree.

There can be no assurance that the Company will not experience
problems associated with FDA regulatory compliance, including
increased general costs of ongoing regulatory compliance and specific
costs associated with the Puritan-Bennett consent decree.  The Company
could experience a material adverse effect on business, operations,
profitability and outlook from, among other things:  (i) requirements
associated with the Puritan-Bennett consent decree; (ii) requirements
arising from continuing company-wide adherence to quality assurance
and good manufacturing practices; (iii) the results of future FDA
inspections of the operations and facilities of the Company; and (iv)
any modification, extension or adverse interpretation of the Puritan-
Bennett consent decree or any product recall, plant closure or other
FDA enforcement activity with respect to the Company.

Environmental Regulation - The Company's operations are subject to a
variety of federal, state and local environmental laws and regulations
that govern, among other things, the generation, handling, storage,
transportation, treatment and disposal of hazardous substances,
discharges to water, and air emissions from equipment and facilities.

Most of the Company's environmental-related capital expenditures are
in response to provisions of the Federal Clean Air Act; Water
Pollution Control Act; Resource Conservation and Recovery Act; and
land use, air and water protection regulations of the various
localities and states, and their foreign counterparts.  Capital
expenditures worldwide relating to air emission control, wastewater
purification, land reclamation and solid waste disposal
totaled approximately $5 million in 1999, $6 million in 1998, and $6
million in 1997.  The Company currently estimates that environmental
capital expenditures during 2000 and 2001 will be $10 million and $12
million, respectively.

The Company had previously recognized the costs associated with the
investigation and remediation of Superfund sites, the litigation of
potential environmental claims, and the investigation and remedial
activities at the Company's current and former operating sites.
Related accruals of $128.8 million at June 30, 1999 are included in
current accrued liabilities and other noncurrent liabilities and
deferred credits.  Any claims for potential recovery from any sources
have not been valued against the accrued environmental liabilities.
While ongoing litigation may eventually result in recovery of costs
expended at certain of the environmental sites, any recovery is
contingent upon a successful outcome and has not been recognized in
the Company's results of operations.

The Company has recognized the costs and associated liabilities only
for those matters that are in its view probable and estimable.  Based
upon information currently available, management believes that
existing accrued liabilities  are sufficient and that it is not
reasonably possible at this time that any additional liabilities will
result from the resolution of these matters that would have a material
adverse effect on the Company's consolidated results of operations or
financial position.

Compliance - Mallinckrodt endeavors to comply with all applicable laws
and regulations, but there can be no assurance that its compliance
efforts will always be acceptable.  Instances of non-compliance have
occurred in the past and, although they have not had a material
adverse impact on the Company, such instances could occur in the
future and possibly have a material adverse impact.  In particular,
the Company is unable to predict the extent to which it may be
adversely affected by future regulatory developments such as new or
changed laws or regulations.

In the fall of 1997, German authorities seized certain records of two
of the Company's non-U.S. subsidiaries, Mallinckrodt Medical GmbH and
Mallinckrodt Radiopharma GmbH.  These seizures were part of
investigations of certain practices at these subsidiaries that
involved payments to physicians and other German healthcare providers.
The investigations, which are ongoing, appear to focus on whether the
payments in question were for research or other services performed by
the recipients, or may have been sales incentives or discounts which
could possibly be contrary to German law.  Based on currently
available information, the Company does not believe that the German
investigations will have a material impact on the Company's
consolidated results of operations or financial position.

See the Environmental Matters section of Legal Proceedings in Item 3,
Management's Discussion and Analysis of Financial Condition and
Results of Operations in Item 7, and Note 20 of the Notes to
Consolidated Financial Statements in Item 8 for additional
information.

Employees
---------

Mallinckrodt had 13,098 employees at June 30, 1999, consisting of
7,531 U.S. based employees and 5,567 employees outside the U.S.

Labor Relations
---------------

In the U.S., the Company has ten collective bargaining agreements with
eight international unions or their affiliated locals covering 846
employees.  Four agreements covering 500 employees were negotiated
during 1999, with no work stoppages.  One agreement covering 70
employees will expire in 2000.  Nine operating locations outside the
U.S. have collective bargaining agreements and/or work counsel
agreements covering approximately 1,173 employees.  Recent wage and
benefit increases were consistent with competitive industry and
community patterns.

ITEM 2.   PROPERTIES

Information regarding the principal plant and properties of
Mallinckrodt is included in the Operations and Other Activities
sections of Business in Item 1.  The Company has distribution
locations in the U.S. in Carlsbad, California; Cincinnati, Ohio; El
Paso, Texas; Mission Viejo, California; Plymouth, Minnesota; St.
Charles, Missouri; and St. Louis, Missouri.

The Company leases space for its international operations in
Argentina, Australia, Austria, Belgium, Brazil, Canada, China,
Colombia, Finland, France, Germany, Ireland, Italy, Japan, Korea,
Malaysia, Mexico, the Netherlands, Philippines, Poland, Portugal,
Puerto Rico, Singapore, South Africa, Spain, Sweden, Switzerland and
United Kingdom.  Additionally, Mallinckrodt leases office space in St.
Louis, Missouri.

The Company believes its manufacturing and distribution facilities are
adequate, suitable and of sufficient capacity to support its current
operations.

ITEM 3.   LEGAL PROCEEDINGS

Environmental Matters
---------------------

The Company is actively involved in the investigation or remediation
of, or is addressing potential claims of, alleged or acknowledged
contamination at approximately 24 currently or previously owned or
operated sites and at approximately 16 off-site locations where its
waste was taken for treatment or disposal.  These actions are in
various stages of development and generally include demands for
reimbursement of previously incurred costs, or costs for future
investigation and/or for remedial actions.  In many instances, the
dollar amount of the claim is not specified.  For some sites, other
potentially responsible parties may be jointly and severally
responsible, along with the Company, to pay for any past remediation
and other related expenses.  For other sites, the Company may be
solely responsible for remediation and related costs.  The Company
anticipates that a portion of these costs will be covered by insurance
or third party indemnities.  A number of the currently pending matters
relate to historic and formerly owned operations of the Company.

Once the Company becomes aware of its potential environmental
liability at a particular site, the measurement of the related
environmental liabilities to be recorded is based on an evaluation of
currently available facts such as the extent and types of hazardous
substances at a site, the range of technologies that can be used for
remediation, evolving standards of what constitutes acceptable
remediation, presently enacted laws and regulations, engineering and
environmental specialists' estimates of the range of expected clean-up
costs that may be incurred, prior experience in remediation of
contaminated sites, and the progress to date on remediation in
process.  While the current law potentially imposes joint and several
liability upon each party at a Superfund site, the Company's
contribution to clean up costs at these sites is expected to be
limited, given the number of other companies which have also been
named as potentially responsible parties and the volumes of waste
involved.  A reasonable basis for apportionment of costs among
responsible parties is determined and the likelihood of contribution
by other parties is established.  If it is considered probable that
the Company will only have to pay its expected share of the total
clean-up, the recorded liability reflects the Company's expected
share.  In determining the probability of contribution, the Company
considers the solvency of the parties, whether responsibility is
disputed, existence of an allocation agreement, status of current
action, and experience to date regarding similar matters.  Current
information and developments are regularly assessed by the Company,
and accruals are adjusted on a quarterly basis, as required, to
provide for the expected impact of these environmental matters.

The Company has established accruals only for those matters that are
in its view probable and estimable.  Based upon information currently
available, management believes that existing accruals are sufficient
and that it is not reasonably possible at this time that any
additional liabilities will result from the resolution of these
matters that would have a material adverse effect on the Company's
consolidated results of operations or financial position.

The following is a brief discussion of certain pending environmental
proceedings which the Company believes, based on currently available
information, are most significant:

Orrington, ME - Hanlin Group, Inc. purchased a chemical manufacturing
facility located in Orrington, Maine from the Company in 1982.  In
April 1989, Hanlin filed suit in the U.S. District Court for the
District of Maine alleging that the Company had operated the facility
in violation of federal and state environmental laws.  More
specifically, Hanlin asserted that the Company had allowed the
discharge of unlawful amounts of mercury, contaminating the soil, air,
groundwater and adjoining waterways.  The parties settled these claims
in 1991.  The facility was subsequently sold to HoltraChem
Manufacturing Company, L.L.C. (HoltraChem); the settlement agreement
was assigned to HoltraChem as part of the sale.  Under the settlement
agreement, the Company agreed to pay specified costs of a study
ordered by the United States Environmental Protection Agency (EPA).  A
draft Site Investigation has been completed by the Company.
Additional investigation was required to address questions posed by
EPA and the State of Maine Department of Environmental Protection
(Maine DEP).  The Company completed the additional work to supplement
the Site Investigation and submitted the final Site Investigation plan
to the EPA and the Maine DEP on December 29, 1998.  The Company and
HoltraChem met with the Maine DEP and EPA in April 1999 to discuss the
conclusions of the Site Investigation.  The Company expects comments
on the Site Investigation plan from the agencies shortly.  Costs of
implementing remedial action at the site will be shared by the Company
and HoltraChem on a yet-to-be agreed basis.  If the parties cannot
reach agreement, the matter will be referred to binding arbitration.

On June 21, 1999, the Company and HoltraChem received a Notice of
Intent to Sue (Notice) under Section 7002(a)(1)(B) of the Resource
Conservation and Recovery Act (RCRA) sent by the Natural Resources
Defense Council, Inc. (NRDC) and the Maine People's Alliance (MPA).
NRDC and MPA allege that the Company as a former owner of the facility
contributed to mercury discharges to the environment that NRDC and MPA
assert pose a continuing risk of harm to public health and the
environment.  NRDC and MPA state that the lawsuit will request that
the Company and HoltraChem abate the hazards to the environment.  The
Notice states that suit will be filed in the United States District
Court for the District of Maine shortly after the expiration of the
ninety day notice period required by law.  The Notice invites the
Company and HoltraChem to contact representatives of NRDC and MPA to
discuss the Notice.  The Company and HoltraChem, through the RCRA
Corrective Action process and with oversight by EPA and Maine DEP, are
currently addressing issues raised in this Notice regarding
contamination attributable to the site.  The Company and HoltraChem
will evaluate this Notice and jointly determine the appropriate
response.

Auburn Hills, MI - The Company is a defendant in an action that was
filed on January 13, 1986 and is currently pending in the U.S.
District Court for the Eastern District of Michigan, styled Frank J.
                                                            --------
Kelley and the City of Pontiac v. Great Lakes Container Corporation,
--------------------------------------------------------------------
et al, relating to a drum reconditioning facility located in Auburn
-----
Hills, Michigan that was leased and operated by the Company in the
1970s.  The State of Michigan (State) and the present owner of the
facility, Columbus Steel Drum Company, Inc., claim that the Company is
jointly and severally liable, along with approximately twenty other
former owners and operators of the facility, for alleged contamination
of soil and groundwater resulting from improper disposal practices.
The State seeks remedial measures at the site and reimbursement for
costs incurred to date.  The current owner seeks reimbursement for
previously incurred clean-up costs and compensation for damages to the
site.  The Company denies any violation of applicable law on its part.
The Company has filed a third-party complaint against approximately
110 parties that sent drums to the facility, seeking contribution for
damages that might be assessed against the Company.

The Company and other parties have explored settlement alternatives,
but have not reached a global settlement to date.  The Company
submitted a Remedial Action Plan (RAP) to the State of Michigan for
this site which was rejected.  Although the Company completed
additional work as requested by the State and prepared a report
describing the results of the additional work and submitted it to the
Court, the Michigan Department of Environmental Quality (MDEQ) decided
to complete additional investigation.

MDEQ hired a consultant to complete these additional studies at the
site.  MDEQ concluded that further additional investigation was
necessary before defining a final RAP for the site.  The Company does
not believe additional investigations are necessary considering the
number of investigations completed to date.  All parties are waiting
for MDEQ to define a final RAP.  The parties to the litigation have
agreed to mediate the issue of the State's past cost claims.  A
mediator has been chosen and mediation was held July 21-23, 1999.  The
mediator plans to report to the judge that negotiations would proceed
better if MDEQ has defined its remedy.  More mediation sessions are
being scheduled.  Discovery is proceeding on the other issues in the
litigation.

St. Louis, MO/CT Decommissioning - The Company processed certain ores,
columbium and tantalum, under license with the Nuclear Regulatory
Commission (NRC) from the 1960s through 1986.  Pursuant to NRC
regulations, the Company is required to complete decommissioning of
the processing areas, buildings and soil on the site where
manufacturing occurred.  The Company submitted a Phase I
Decommissioning Plan to the NRC in November 1997 and received NRC
comments in February 1999.  The Company is developing the Phase II
Decommissioning and Decontamination Plan to submit to the NRC.  This
plan was due in December 1998, but the Company received an extension
to submit the Phase II Plan in June 2000.  The Company submitted a
Financial Assurance Plan to the NRC as requested in April 1999.  The
Company is waiting for NRC comments.

St. Louis, MO/RCRA Corrective Action - The Company's St. Louis plant
has a Resource Conservation Recovery Act (RCRA) Part B permit which
requires the facility to undergo corrective action.  The Company
worked with the Missouri Department of Natural Resources (MDNR) to
complete the RCRA Facility Assessment and identified certain Solid
Waste Management Units (SWMUs) and Areas of Concern (AOCs).  The
Company received its Part B permit and appealed certain provisions.
The Company has negotiated a resolution of its appeal.  The MDNR has
conditionally approved the RCRA Facility Investigation Final Work Plan
(Work Plan) submitted by the Company, which describes additional
investigation of certain SWMUs and AOCs.  The Company has started
field work in accordance with the Work Plan and is submitting
quarterly reports to the MDNR.  Activities are continuing in
accordance with the RCRA process.

Raleigh, NC - The Company's bulk pharmaceutical facility has been
operating since the mid 1960s.  It has a Resource Conservation
Recovery Act (RCRA) Part B permit which requires the facility to
undergo corrective action.  There are several phases to the corrective
action process.  The Company has worked with federal and state
agencies to identify certain Solid Waste Management Units (SWMUs).
The Company received its permit and submitted a RCRA Facility
Investigation Work Plan (RFI Work Plan) to the North Carolina
Department of Environment, Health and Natural Resources (Agency)
proposing to investigate the SWMUs.  The Agency identified certain
technical issues concerning the RFI Work Plan and the Company
responded to these issues through revisions to the RFI Work Plan.  The
Company continues to work with the Agency to complete the RCRA
process.

Final approval of the RFI Work Plan was issued in December 1997.
Field work commenced in March 1998 and was completed in May 1998.  The
RCRA Facility Investigation Report (RFI Report) on these activities
was submitted to the Agency in February 1999.  Mallinckrodt is
awaiting approval and comment on the RFI Report.

Animal Health Business Properties - The Company sold its animal health
business in June 1997 to Schering-Plough Corporation (S-P) and
provided an environmental indemnity to S-P.  This indemnity covered
both U.S. facilities and international facilities.  The indemnity
lasts for a term of fifteen years and is limited to claims arising
from activities and uses of the property prior to closing.  The
Company is working with S-P and the Indiana Department of
Environmental Management (IDEM) to resolve certain issues regarding
the Resource Conservation and Recovery Act (RCRA) requirements at the
Terre Haute, Indiana facility.  The facility had begun the RCRA
Corrective Action process, but decided to allow the RCRA Part B permit
to expire.  Mallinckrodt and S-P have determined to proceed under the
IDEM's voluntary remediation program (VRP).  Mallinckrodt is
submitting a VRP application and is awaiting comments from IDEM.

Under the terms of the indemnity, S-P had the option to conduct
baseline environmental assessments at all of the properties
transferred.  S-P has completed initial baseline assessments and has
made certain claims against the Company under the indemnity.
Furthermore, the Company transferred several facilities to S-P as part
of the sale of the Company's animal health business in the following
South American locations:  Buenos Aires, Argentina; Cali, Colombia;
Cotia, Brazil; Itu, Brazil; and Luque, Paraguay.  During the baseline
study performed in connection with the sale, chemical constituents
were identified at these sites.  Based on the information obtained
upon completion of the baseline study, S-P determined that it needed
to further delineate the extent of any potential contamination.  S-P
provided copies of proposed investigations to the Company in late
March 1999.  The Company has hired outside consultants to assist it in
evaluating the environmental requirements of the various countries to
determine if additional investigation and/or remediation is necessary
or required.  The Company does not necessarily agree that additional
delineation and/or investigation is necessary.  The Company is
reviewing the delineation proposals made by S-P and plans to provide
comments.  S-P has not made formal claims regarding these sites.

The Company recognized the estimated incremental expense associated
with the indemnification of environmental liabilities in the loss
recorded on the sale of the business in 1997.  The Company intends to
vigorously defend its position in connection with the environmental
matters in connection with the formerly owned animal health business.

Erie, PA (Calsicat) - The Company sold its facility located in Erie,
Pennsylvania to Engelhard Corporation (Engelhard) in May 1998.  This
facility manufactures a variety of specialty catalysts.  As part of
the transaction, the Company provided an environmental indemnity to
Engelhard.  This indemnity distinguishes between on-site and off-site
liabilities.  On-site liabilities are limited to a term of five years.
The Company has an obligation to jointly manage any on-site
liabilities covered by the indemnity which require remediation.  Off-
site liabilities for activities arising from pre-closing activities
are indemnified without a time limit.  The Company and Engelhard are
working together to address an ongoing groundwater collection and soil
remediation project at the site.  This project is being managed under
the oversight of the Pennsylvania Department of Environmental
Protection (PADEP).  The Company and Engelhard have applied to
participate under the Pennsylvania voluntary remediation program for
the current groundwater collection system.  The PADEP has indicated
the voluntary remediation proposal is feasible.  The Company has
accruals to address the ongoing remediation projects and potential
environmental claims under the indemnity.

Allentown, PA (Trimet) - The Company sold its operations in Allentown,
Pennsylvania to Geo Specialty Chemicals, Inc. (Geo) in July 1998.
This facility currently manufactures formaldehyde and a limited number
of specialty chemicals.  The facility had previously been operated as
an explosives manufacturing plant.  The Company retained a portion of
the property where no manufacturing activities currently occur.  The
Company provided an environmental indemnity to Geo for certain
environmental activities which may be required by governmental
agencies and a more limited indemnity for potential environmental
claims arising from the actions of Geo.

In addition to the indemnity, the Company has retained responsibility
for completion of two ongoing remediation projects, including
demolition of certain buildings and closure of a wastewater lagoon, as
well as other environmental issues.  The Company has presented a
remediation plan to the Pennsylvania Department of Environmental
Protection (PADEP) which includes consolidation of the wastewater
lagoon sludges in one of the onsite lagoons.  The Company is in the
process of discussions with the PADEP and is coordinating these
activities with Geo.  The Company has established a reserve to address
the ongoing remediation projects, potential environmental claims under
the indemnity, and other potential environmental issues.

Springville, UT - In 1996, the Company entered into an interim
settlement agreement with Ensign-Bickford Industries, Inc. (EBI) to
share certain costs of remediating groundwater that allegedly has been
impacted by nitrates and explosive compounds emanating from EBI's
Springville, Utah explosives plant.  The plant, under a series of
owners, has been manufacturing explosives at the mouth of the Spanish
Fork Canyon in Utah since the 1940s.  The Company sold the plant and
related assets to the Trojan Corporation in 1982.  EBI acquired the
Trojan Corporation in 1986 and has operated the plant since that time.
Pursuant to a 1991 stipulation and consent order with the State of
Utah (State), EBI has conducted a feasibility study of alternatives
for remediating impacted off-site groundwater.  EBI also is conducting
a RCRA Corrective Action study under a 1995 consent order with the
State.  The Company and EBI have entered into an interim allocation
agreement with two additional parties to address funding remedial
activities at this site.

The parties have continued to meet with the Utah Department of
Environmental Quality (DEQ) to update the DEQ on the progress of the
off-site groundwater remedial activities and the progress of RCRA
Corrective Action activities at the site.  The Revised RFI Work Plan
(Plan) prepared as part of the RCRA Corrective Action process was
submitted to the DEQ in December 1998.  The DEQ commented on the Plan
and the parties provided responses to the comments.  The parties
received conditional approval of the Plan by the DEQ in June 1999.
The parties are preparing to conduct the initial analytical testing in
accordance with the Plan.  An allocation consultant hired by the
parties has been reviewing documents and is going to assist in
developing a process to negotiate a final allocation.

In October 1996, a resident with property bordering the Springville
site filed suit against EBI in the U.S. District Court for the
District of Utah (Don Henrichsen, et al v. The Ensign-Bickford
                  --------------------------------------------
Company, et al) alleging nuisance and trespass for contamination that
--------------
allegedly migrated onto the resident's property.  On January 31, 1997,
the Company was added as a defendant.  Depositions are being completed
and expert reports have been generated.  The Plaintiffs have made
settlement overtures, but the negotiations have not progressed.  The
trial date for this case has been reset for December 1999.

Ensign-Bickford Industries, Inc. and The Ensign-Bickford Company
(jointly called, EBI) and the Company have received three additional
complaints by nearby residents alleging personal injury and property
damage from migration of contaminants from facility operations.  All
of the lawsuits have been filed in the U.S. District Court for the
District of Utah.  The lawsuits are styled as follows:  Howard Ruff
                                                        -----------
and Kay Ruff v. Ensign-Bickford Industries, Inc., et al (filed
-------------------------------------------------------
February 26, 1999);  Charles Bates and Ellen Bates v. Ensign-Bickford
                     ------------------------------------------------
Industries, Inc., et al (filed March 9, 1999); and Rodney Petersen and
-----------------------                            -------------------
Marilyn Petersen v. Ensign-Bickford Industries, Inc. (filed April 15,
----------------------------------------------------
1999).  These suits allege that the Company and EBI's actions in
operating the facility caused injury.  Answers were filed in the Ruff,
                                                                 ----
Bates, and Petersen complaints in early May 1999.  The parties are
-----      --------
currently working on various pre-trial matters.  The Company and EBI
are jointly defending these actions.

The Company has also received another letter in connection with this
site from the children of David Nemelka and Kent Stephens who had
previously settled a lawsuit with the Company and EBI.  In this
letter, counsel for the children of these parties has made a demand
for payment to address multiple illnesses alleged to have been caused
by contaminants originating at the Springville, Utah plant site.  The
Company and EBI are currently evaluating these potential claims.  No
complaint has been filed.

The State also has advised EBI that it is investigating a natural
resource damages claim; however, the State has not indicated it plans
to pursue this claim.  Nevertheless, all parties have entered into a
Tolling Agreement with the State in connection with the potential
natural resource damages claim.

Other Litigation
----------------

The Company is a party to a number of other legal proceedings arising
in the ordinary course of business.  The Company does not believe
these pending legal matters will have a material adverse effect on its
financial condition or the results of the Company's operations.  The
most significant of these matters involve two products, OPTISON* and
convective warming blankets.

OPTISON* Patent Litigation - On July 31, 1997, the Company and its
licensor, Molecular BioSystems, Inc. (MBI), filed suit (the
Mallinckrodt/MBI Action) in the United States District Court for the
District of Columbia against four potential competitors - Sonus
Pharmaceuticals, Inc. (Sonus), Nycomed Imaging AS (Nycomed), ImaRx
Pharmaceutical Corp. (ImaRx) and its marketing partner DuPont Merck,
and Bracco International BV (Bracco) - seeking declarations that
certain of their ultrasound contrast agent patents are invalid.  The
complaint alleges that each of the defendant's patents are invalid on
a variety of independent grounds under United States patent laws.  In
addition to requesting that all of the patents in question be declared
invalid, the complaint requests a declaration that contrary to the
defendants' contentions, MBI and the Company do not infringe the
defendants' patents, and asks that the defendants be enjoined from
proceeding against MBI and the Company for infringement until the
status of the defendants' patents has been determined by the court or
the U.S. Patent and Trademark Office (PTO).  The complaint alleges
that each defendant has claimed or is likely to claim that its patent
or patents cover OPTISON* and will attempt to prevent its
commercialization.

Each of the defendants, except Nycomed, filed a motion to dismiss the
complaint on jurisdictional grounds.  In January 1998, the court
dismissed the complaint against (a) ImaRx (and its marketing partner,
DuPont Merck) and Bracco for lack of jurisdiction, and (b) Sonus for
improper venue.  The court's ruling did not purport to rule on the
merits of the Company and MBI's claims.  The Company and MBI elected
not to appeal the court's decision.  Accordingly, only the action
against Nycomed is proceeding in the District Court for the District
of Columbia.  Discovery in the Mallinckrodt/MBI Action against Nycomed
has been stayed until the court rules on a motion filed by the Company
and MBI for summary judgment on the grounds of invalidity of Nycomed's
patent.  The motion has been fully briefed and the parties are
awaiting the court's ruling.

On April 21, 1998, Nycomed filed an action in the District Court of
The Hague, the Netherlands against various Mallinckrodt European
entities and MBI, alleging that OPTISON* infringed or will infringe
its European patent EP 0576521.  Nycomed is seeking an injunction
against future sales and damages.  The patent that is the subject of
this action is the counterpart of Nycomed's United States patent that
is the subject matter of the Mallinckrodt/MBI Action.  A hearing was
scheduled for October 1998.

On October 13, 1998, Mallinckrodt Medical B.V., through counsel,
appeared in court in response to the legal action filed by Nycomed in
the District Court of The Hague.  The other named defendants,
Mallinckrodt Medical GmbH, Mallinckrodt Medizintechnik GmbH,
Mallinckrodt Chemical GmbH, Mallinckrodt Medical Holdings GmbH,
Mallinckrodt Chemical Holdings GmbH, and MBI were not as yet served
and did not appear.  For Nycomed to proceed with the action, it must
formally serve the six unserved defendants outside the Netherlands
under The Hague Convention.

Following the dismissal of Sonus as a defendant in the
Mallinckrodt/MBI Action, Sonus activated a patent infringement lawsuit
(the Sonus Action) that it had filed on August 4, 1997 against the
Company and MBI in the United States District Court for the Western
District of Washington.  Although the complaint was filed in August
1997, Sonus had agreed not to proceed with its action until the
jurisdictional motions were decided in the Mallinckrodt/MBI Action.
Sonus's complaint alleges that the manufacture and sale of OPTISON* by
the Company and MBI infringe two patents owned by Sonus.  The Company
and MBI have filed a counterclaim seeking a declaration of invalidity
and non-infringement with respect to the Sonus patents.

The Sonus Action was stayed until reexamination proceedings in the PTO
were concluded.  These proceedings have concluded with the PTO
confirming patentability of some of the claims in the two patents
under reexamination.

The court has lifted the stay and pretrial discovery has resumed.
Trial is scheduled for early in calendar year 2000.  The Company will
continue to challenge the Sonus patents in this litigation.

On May 3, 1999, ImaRx and DuPont Pharmaceuticals (DuPont) filed suit
against MBI and the Company in the United States District Court for
the District of Delaware.  The suit alleges that the manufacture and
sale of OPTISON* by the Company and MBI infringe two patents owned by
ImaRx and licensed to DuPont.  As noted above, the Company and MBI had
previously filed an action in July 1997 in the United States District
Court for the District of Columbia to declare these patents invalid or
not infringed, but that action was dismissed on jurisdictional
grounds.  Since that time, the patents have undergone reexamination in
the PTO with the PTO recently confirming patentability of the claims
of the patents.  The Company and MBI will defend this suit on the
grounds of invalidity and non-infringement with respect to the ImaRx
patents.

Augustine Medical, Inc. - On October 6, 1994, Augustine Medical, Inc.
(Augustine) commenced patent infringement litigation against
Mallinckrodt Group Inc. and Mallinckrodt Medical, Inc. (the Company)
in the United States District Court for the District of Minnesota.
The original complaint was amended to include allegations of patent
infringement regarding U.S. Patent Nos. 4,572,188 (the '188 patent);
5,300,102 (the '102 patent); 5,324,320 (the '320 patent); and
4,405,371 (the '371 patent).  Specifically, Augustine alleged that the
Company's sale of all five (5) models of its convective warming
blankets infringes certain claims of one or more of the aforementioned
patents.  Augustine sought to have the Company permanently enjoined
from further acts of alleged infringement and an award of damages
adequate to compensate for the Company's alleged infringement,
together with attorneys' fees.  Augustine included a claim of willful
infringement and requested enhanced damages based thereon.

The Company filed a motion for summary judgment of non-infringement of
all of the asserted patents and the magistrate judge issued a report
and recommendations dated March 18, 1996 indicating that there is no
literal infringement of the '188 patent, but that factual questions
existed with respect to infringement of the '102 patent, the '320
patent, and the '371 patent (the Remaining Patents) and as to whether
the '188 patent is infringed under the doctrine of equivalents.  The
Company also filed a motion for summary judgment of invalidity of
certain claims of the '371 patent.  The court granted the Company's
motion for summary judgment and found claims 1, 3, 4 and 8 of
Augustine's '371 patent to be invalid.

On July 18, 1997, the magistrate judge issued a report and
recommendation indicating that in addition to there being no literal
infringement of the '188 patent, there is no infringement under the
doctrine of equivalents.  This was confirmed by the court and the '188
patent was eliminated from the case.

The liability phase of the case was tried to a jury in August 1997 and
the verdict was that the Company's blankets infringe the Remaining
Patents under the doctrine of equivalents, but do not literally
infringe the patents.  There was also a finding of no willful
infringement.  On September 22, 1997, the jury awarded damages in the
amount of $16.8 million.  The Company appealed the jury verdicts of
liability and damages to the Court of Appeals for the Federal Circuit
(a special court for patent appeals).  With the advice of outside
counsel, the Company believed there was insufficient evidence of
equivalents presented and consequently for this and other reasons the
verdicts were in error.

On June 8, 1999, the Court of Appeals for the Federal Circuit
overturned the District Court's ruling, holding that the Company's
blankets do not infringe Augustine's patents.  On June 21, 1999,
Augustine filed a motion for reconsideration by the Court of Appeals
for the Federal Circuit.  On August 8, 1999, this motion was denied
and on August 13, 1999, the decision of the Court of Appeals for the
Federal Circuit was issued as a mandate to the District Court.  The
District Court in Minneapolis has ordered a hearing on September 16,
1999 to settle any remaining issues including Mallinckrodt's petition
for costs and attorneys' fees.

On February 24, 1998, Augustine filed an action in the District Court
of The Hague, the Netherlands against Mallinckrodt Inc., various
Mallinckrodt European entities and Mallinckrodt distributors
(collectively Mallinckrodt) alleging that Mallinckrodt Warm Touch*
blankets infringe its European patent EP 0311336.  Augustine sought an
injunction against future sales and damages.  This European patent is
a counterpart of Augustine's United States patent which was the
subject matter of above-described litigation between the parties in
the United States District Court in the District of Minnesota.  Trial
of this action was held in December 1998.

In February 1999, the court held that Mallinckrodt's blankets do not
infringe Augustine's European patent.  Augustine has appealed the
court's ruling.  Mallinckrodt's response to the appeal is due in
September, 1999.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During the three months ended June 30, 1999, there were no matters
submitted to a vote of the Company's shareholders.

EXECUTIVE OFFICERS OF THE REGISTRANT

The ages and five-year employment histories of Mallinckrodt's
executive officers at June 30, 1999 were as follows:

Barbara A. Abbett
Age 59.  Vice President, Communications of the Company since April
1994.

Ashok Chawla
Age 49.  Senior Vice President of the Company and President, Global
Business Group, since February 1998; Senior Vice President, Strategic
Management of the Company from October 1997 to February 1998; Vice
President, Strategic Management of the Company from July 1991 to
October 1997.

Michael J. Collins
Age 45.  Senior Vice President of the Company and President,
Pharmaceuticals Group since February 1998; Vice President of the
Company from May 1996 to February 1998; President, Pharmaceutical
Specialties Division from December 1995 to February 1998; and Group
Vice President, Pharmaceutical Specialties, Mallinckrodt Chemical,
Inc. from 1992 to 1995.

Bruce K. Crockett, Ph.D.
Age 55.  Vice President, Human Resources of the Company since March
1995; and Vice President, Organization Development at Eastern
Enterprises from 1990 to February 1995.

Bradley J. Fercho
Age 41.  Senior Vice President of the Company and President, Imaging
Group since November 1998; Vice President, North America Field
Operations, Imaging from early 1998 to November 1998; Vice President,
North America Field Sales from September 1995 to early 1998; and
Strategic Accounts Executive during 1993 to September 1995.

John Q. Hesemann
Age 51.  Senior Vice President of the Company and President,
Respiratory Group since June 1998; and Vice President, Mallinckrodt
Medical, Inc., Imaging-Contrast Media from 1994 to 1998.

C. Ray Holman
Age 56.  Chairman of the Company since October 1994; Chief Executive
Officer of the Company since December 1992; and President of the
Company from 1992 to 1995.

Roger A. Keller
Age 54.  Vice President, Secretary and General Counsel of the Company
since July 1993.

Douglas A. McKinney
Age 46.  Vice President and Controller of the Company since October
1997; Treasurer of the Company from November 1995 to October 1997; and
Assistant Treasurer July 1991 to November 1995.

Adeoye Y. Olukotun
Age 54.  Vice President, Medical and Regulatory Affairs of the Company
since June 18, 1996; Vice President, Bristol-Meyers Squibb Company
1991 to June 1996.

Michael A. Rocca
Age 54.  Senior Vice President and Chief Financial Officer of the
Company since April 1994.

William B. Stone
Age 56.  Vice President, Information Services of the Company since
August 1996; and Vice President and Controller of the Company from
November 1990 to August 1996.

Frank A. Voltolina
Age 38.  Staff Vice President and Treasurer of the Company since
October 1997; Vice President, Corporate Tax from 1995 to 1997; and
Assistant Controller, Director of Tax from 1993 to 1995.

Miscellaneous
All of the Company's officers are elected annually in October.  No
"family relationships" exist among any of the listed officers.

<PAGE>

PART II.

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
          STOCKHOLDER MATTERS

Common Stock Prices and Dividends

                                                 Quarter
                                 ------------------------------------
                                  First    Second    Third    Fourth
                                 -------  --------  -------  --------
Fiscal 1999
 Dividends per common share..... $  .165   $  .165  $  .115  $  .165
 Common stock prices
  High..........................  30.938    33.438   36.375   37.563
  Low...........................  19.750    19.750   25.563   25.688

Fiscal 1998
 Dividends per common share..... $  .165    $ .165  $  .165  $  .165
 Common stock prices
  High..........................  41.375    39.438   40.063   39.750
  Low...........................  34.750    36.000   34.688   29.000

In February 1999, the Board of Directors of the Company approved the
redemption of the Company's non-voting common stock purchase rights at
the redemption price of five cents per right effective March 15, 1999.
The combined payment of the redemption price and the third quarter
dividend equaled 16.5 cents per share.

The principal market on which Mallinckrodt's common stock is traded is
the New York Stock Exchange.  Common stock prices are from the
composite tape for New York Stock Exchange issues, as reported in The
Wall Street Journal.  As of July 31, 1999, the number of registered
holders of common stock as reported by the Company's registrar was
7,045.

<PAGE>


<TABLE>
ITEM 6.   SELECTED FINANCIAL DATA
(Dollars in millions, except per share amounts)
<CAPTION>
                                         Year Ended June 30,
                         ------------------------------------------------------
                           1999       1998(1)     1997       1996       1995
                         ---------   ---------  ---------  ---------  ---------
<S>                      <C>         <C>        <C>        <C>        <C>
SUMMARY OF OPERATIONS
Net sales..............  $2,581.2    $2,367.0   $1,698.1   $1,596.9   $1,433.8
Earnings (loss)
 from continuing
 operations............     172.9      (268.4)     175.2      143.6      127.0
Discontinued
 operations (2)........      23.3        72.4       14.9       68.3       53.3
Cumulative effect
 of accounting
 change (3)............                  (8.4)
                         ---------   ---------  ---------  ---------  ---------

Net earnings (loss)....     196.2      (204.4)     190.1      211.9      180.3
Preferred stock
 dividends.............       (.4)        (.4)       (.4)       (.4)       (.4)
                         ---------   ---------  ---------  ---------  ---------

Available for common
 shareholders..........  $  195.8    $ (204.8)  $  189.7   $  211.5   $  179.9
                         =========   =========  =========  =========  =========

PER COMMON SHARE DATA
Diluted earnings
 (loss) from continuing
  operations...........  $   2.40    $  (3.69)  $   2.33   $   1.88   $   1.63
Diluted net
 earnings (loss).......      2.72       (2.81)      2.53       2.77       2.32
Dividends declared.....       .61         .66        .65        .61        .55
Redemption of common
 stock purchase
 rights................       .05
Book value.............     14.84       13.60      17.16      16.44      15.12

OTHER DATA
Total Assets...........  $3,657.4    $3,873.1   $2,975.4   $3,017.6   $2,488.6
Working capital........  $   26.9    $   (8.8)  $  963.1   $  359.1   $  271.9
Current ratio..........     1.0:1       1.0:1      2.5:1      1.4:1      1.5:1
Total debt (4).........  $1,126.3    $1,255.9   $  555.9   $  666.1   $  584.0
Shareholders' equity...  $1,060.4    $1,005.9   $1,251.2   $1,232.2   $1,171.5
Return on
 shareholders'
 equity (4)............       17%       (24)%        14%        12%        12%
Capital
 expenditures (4)......  $  116.9    $  142.7   $  104.4   $  116.6   $  124.3
Total dividends paid...  $   43.9    $   48.5   $   48.2   $   45.7   $   42.2
Redemption of common
 stock purchase
 rights................  $    3.6
Weighted-average
 common shares-diluted
 (in millions).........      71.9        73.5       75.1       76.4       77.5
Common shares
 outstanding
 (in millions).........      70.7        73.2       72.3       74.3       76.8
Number of
 employees (4).........    13,100      13,300      8,000      8,000      7,800

</TABLE>

(1)  On August 28, 1997, the Company acquired Nellcor Puritan Bennett
     Incorporated (Nellcor) through an agreement to purchase for cash
     all of the outstanding shares of common stock of Nellcor for
     $28.50 per share.  The aggregate purchase price of the Nellcor
     acquisition was approximately $1.9 billion, and $308.3 million of
     the purchase price was allocated to purchased research and
     development.  This intangible asset, which had no tax benefit,
     was charged to results of operations during 1998.  Of the total
     charge of $308.3 million, $2.0 million related to the Aero
     Systems division which was sold and reclassified to discontinued
     operations in 1998.

     The sale of Nellcor inventories, which were stepped up to fair
     value in connection with allocation of purchase price, decreased
     earnings by $75.4 million, $46.7 million net of taxes for 1998.
     After-tax charges to the Respiratory segment, which are included
     in earnings (loss) from continuing operations, were $46.1
     million.  After-tax charges to discontinued operations related to
     the Aero Systems division were $.6 million.

     Costs of exiting certain activities related to Mallinckrodt
     operations plus integration costs of the combined Mallinckrodt
     and Nellcor operations were $68.6 million, $46.4 million net of
     taxes.  See the Exit Activities and Restructuring Charges section
     of Note 2 of the Notes to Consolidated Financial Statements for
     additional disclosure.

(2)  See Note 2 of Notes to Consolidated Financial Statements for
     information on discontinued operations in 1999, 1998 and 1997.
     Results for 1996 and 1995 represent earnings from the catalysts
     and chemical additives division, animal health segment, Fries &
     Fries, Inc., and the feed ingredients business, partially offset
     by environmental and related litigation charges.

(3)  In April 1998, the American Institute of Certified Public
     Accountants (AICPA) issued SOP 98-5, "Reporting on the Costs of
     Start-Up Activities" (SOP 98-5), which requires that costs
     related to start-up activities be expensed as incurred.  Prior to
     1998, the Company capitalized its preoperating costs incurred in
     connection with opening a new facility.  The Company elected to
     early adopt the provisions of SOP 98-5 in its financial
     statements for 1998.  The effect of adoption of SOP 98-5 was to
     record a charge of $8.4 million, net of taxes, for the cumulative
     effect of an accounting change to expense costs that had
     previously been capitalized prior to July 1, 1997.

(4)  Excludes discontinued operations.

<PAGE>

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS.

Mallinckrodt Inc. and its subsidiaries, collectively, are called the
"Company" or "Mallinckrodt."  All references to years are to fiscal
years ended June 30 unless otherwise stated.  The 1998 consolidated
financial statements were restated for a reduction in purchased
research and development and a corresponding increase in goodwill,
which resulted in an increase in amortization expense.  Certain
amounts in prior years were reclassified to conform to the current
year presentation.  All earnings per share amounts are calculated on a
diluted basis unless otherwise stated.

OVERVIEW

1999 vs. 1998
-------------

In 1999, Mallinckrodt had earnings from continuing operations of
$172.9 million, or $2.40 per share.  The Company incurred a loss from
continuing operations of $268.4 million, or $3.69 per share, for 1998.
The 1998 results of operations included nonrecurring acquisition and
integration charges related to the acquisition of Nellcor Puritan
Bennett Incorporated (Nellcor) in August 1997 which totaled $398.8
million net of taxes, or $5.47 per share.  Excluding these charges,
earnings from continuing operations would have been $130.4 million, or
$1.77 per share.  The 1999 earnings from continuing operations and per
share results represent improvements of 33 percent and 36 percent,
respectively, when compared to 1998 results after excluding the
nonrecurring charges.  This year over year improvement is primarily
attributable to operating earnings improvement in the Respiratory and
Pharmaceuticals segments of the Company's operations while
profitability of the Imaging segment declined.

Net earnings for 1999 were $196.2 million, or $2.72 per share as
compared to a net loss of $204.4 million, or $2.81 per share during
the prior year.  Net earnings for 1999 included an after-tax gain of
$23.3 million on the sale of the remaining operation of the catalysts
and chemical additives division which was reclassified to discontinued
operations in 1998.  The net loss in 1998 included an after-tax gain
of $80.3 million associated with the completed sales and results of
operations of the catalysts and chemical additives and Aero Systems
divisions.  During the third quarter of 1998, the Company recorded an
after-tax charge of $7.9 million related to settlement costs from the
sale of the animal health business in the prior year.  The net loss
for 1998 also included an after-tax charge of $8.4 million for the
cumulative effect of an accounting change for the early adoption of a
new standard of accounting related to previously capitalized start-up
costs.

Net sales for 1999 increased 9 percent to $2.58 billion compared with
$2.37 billion in 1998.  Sales to customers outside the U.S. were $838
million or 32 percent of total 1999 sales.  The year to year sales
comparison benefited from the fact that 1998 sales only included sales
of Nellcor after the acquisition which occurred on August 28, 1997.

The acquisition of Nellcor was accounted for under the purchase method
of accounting and, accordingly, the results of operations of Nellcor
have been included in the Company's consolidated financial statements
since September 1, 1997.  The purchase price of the acquisition was
allocated to the assets acquired and liabilities assumed based upon
generally accepted accounting principles and estimated fair values at
the date of acquisition.

As a result of the Nellcor acquisition, purchased research and
development valued at $308.3 million was charged to operations during
the first quarter of 1998.  The purchased research and development
represents the value of numerous new medical devices and other
products/technologies underway in all major product lines of Nellcor
that were in various stages of development and had not reached
technological feasibility at the date of acquisition.  The value
represents the projected net cash flows based upon management's
estimates of future revenues and expected profitability of each
product/technology.  The projected net cash flows were discounted at a
rate which accounts for the time value of money as well as the risks
of realization of the cash flows.  The discounted cash flows were then
reduced to reflect only the accomplishments made by Nellcor through
the acquisition date toward the products' ultimate completion.

The largest components of purchased research and development were in
the pulse oximetry, including perinatal, and the hospital ventilator
businesses which represent approximately 63 percent and 15 percent,
respectively, of purchased research and development.

The pulse oximetry projects underway at the date of acquisition
related to development of new monitors and disposable sensors.  The
most significant project involves a new family of products that
provide enhanced capabilities and ease of use.  This project
anticipated sales revenue to begin in 2000.  With many of the
products/features of this new family of products still in development,
the market release dates for all the items in this line of next
generation products has not been finalized.  The other major project
within oximetry is the development of a fetal oximeter, a new monitor
to directly measure fetal oxygenation during labor and delivery.  This
perinatal product is intended to provide reassurance to obstetricians
when a baby is adequately oxygenated in the presence of a non-
reassuring fetal heart rate (FHR).  In this common situation, a
cesarean section is often performed due to concern for possible fetal
distress - as suggested by the FHR pattern.  Unfortunately, since a
non-reassuring FHR is an indirect indicator of fetal hypoxia with poor
specificity, many of these cesarean sections are retrospectively seen
to be unnecessary.  By providing a direct measure of oxygenation, the
fetal oximeter may help prevent unnecessary cesarean sections for
suspected fetal distress.  Although Mallinckrodt and several partners
are already marketing this technology in more than 20 countries, it is
pending final PMA submission in the United States.  Sales to date are
below original projections because the Company expected a large
percentage of global revenue to be generated in the United States due
to its relatively high birth rate utilizing cesarean section.

The most significant projects in development in the hospital
ventilator business at the date of acquisition were the Models 840*
and 740*/760* ventilators.  These hospital ventilators were expected
to be commercially available in the U.S. within two years of the
acquisition date.  All three models received U.S. Food and Drug
Administration (FDA) market clearance by December 1998.  Actual
revenues of these projects have experienced shortfalls when compared
to revenue estimates as of the acquisition date.  These shortfalls are
primarily attributable to delays in receiving regulatory clearance to
market and problems with production ramp up activities which often
occur in the early stages of manufacturing a new product.  These
factors are no longer concerns and, although sales were less than
expected in 1998, the ramp up in 1999 was consistent with our
expectations.  Revenue shortfalls experienced to date are not
indicative of any expected inability of these products to meet
customer needs or their long-term revenue expectations.

Although market release dates for the most significant in-process
projects and acquired technologies discussed above have experienced
delays, the projections of total revenues to be generated and
estimated costs to complete that were developed at acquisition date
were appropriate.  Based upon results to date, the major risks
associated with completion and commercialization of these products are
to transform concepts into designs that meet customer requirements,
gain regulatory approval and market clearance in key markets, and ramp
up the manufacturing process once regulatory approval is obtained.
Actual revenue shortfalls, which have occurred to date in these
businesses when compared with projections developed at the date of
acquisition, are not expected to materially reduce the expected long-
term revenues of these products, but only the timing of the receipt of
these revenues.  Material negative variations from the projected
results, should they occur, will reduce the expected rate of return on
the investment to acquire Nellcor and negatively impact the Company's
consolidated results of operations and financial position.

Immediately after the acquisition of Nellcor was consummated,
management of the combined Company formulated an integration plan to
combine Mallinckrodt and Nellcor into one company.  Since both
companies (Mallinckrodt and Nellcor) had global healthcare operations,
senior management, through transition teams, assessed which activities
should be consolidated.  Management finalized and approved a Nellcor
integration plan during 1998.  Accordingly, the Company recorded
additional purchase liabilities during 1998 of $50.1 million, $30.8
million net of related tax benefit, which were included in the
acquisition cost allocation and related goodwill.  The principal
actions of the plan included the involuntary severance of
approximately 450 Nellcor employees as a result of work force
reduction primarily in U.S. administrative areas at a cost of $37.2
million, relocation of Nellcor employees at a cost of $3.8 million,
and the elimination of contractual obligations of Nellcor which had no
future economic benefit at a cost of $9.1 million.  The actual number
of employees terminated was 425.  Approximately $45.4 million of cash
expenditures were incurred through June 30, 1999 and liabilities of
$1.6 million related to the Nellcor integration plan remained in
accrued liabilities at June 30, 1999.  In June 1999, the estimated
liability was reduced by $3.1 million, $1.9 million net of related tax
benefit, with a corresponding $1.9 million reduction of goodwill
primarily as a result of reduced severance costs.  The remaining cash
expenditures will occur in 2000 and, although none are expected,
further reductions in the estimated liability for these integration
activities will be offset against the related goodwill.

During 1998, the Company recorded a pretax charge to selling,
administrative and general expenses of $19.1 million associated with
exiting certain activities related to Mallinckrodt operations.  The
charge included severance costs of $17.1 million related to the
involuntary severance of approximately 130 Mallinckrodt employees as a
result of work force reduction primarily in the Europe administration
function and U.S. sales force, and facility exit costs of $2.0 million.
The actual number of employees terminated was 115.  Approximately
$14.5 million of cash expenditures have been incurred through June 30,
1999.  In June 1999, the associated accrual was reduced by $.7 million
and credited to selling, administrative and general expenses.  The
remaining $3.9 million cash expenditures will occur in 2000.
Restructuring actions are to be complete in 2000 and no further
adjustments to the reserve are anticipated.

1998 vs. 1997
-------------

During the past two years, Mallinckrodt completed the largest
acquisition in its history and divested certain businesses to improve
the strategic position and focus of the Company.

On August 28, 1997, the Company acquired Nellcor through an agreement
to purchase for cash all of the outstanding shares of common stock of
Nellcor for $28.50 per share.  The aggregate purchase price of the
Nellcor acquisition was approximately $1.9 billion.  Nellcor is the
worldwide market leader in providing products that monitor, diagnose
and treat respiratory impaired patients.  The product lines include
pulse oximetry monitors and sensors, critical care and portable
ventilators, home oxygen therapy products, sleep apnea diagnostic and
therapy products, and medical gas products and distribution systems.

The acquisition was accounted for under the purchase method of
accounting and, accordingly, the results of operations of Nellcor have
been included in the Company's consolidated financial statements since
September 1, 1997.

The purchase price of the acquisition was allocated to the assets
acquired and liabilities assumed based upon generally accepted
accounting principles and estimated fair values at the date of
acquisition.  Identifiable intangible assets were purchased research
and development, technology, trademarks and trade names, and the
assembled work force.  The purchased research and development of
$308.3 million was charged to expense in 1998.  Technology, also
referred to as core or base technology and which represents that
portion of the existing technology that provides a basis for future
generation products as well as existing products, was recorded at
$374.2 million and is being amortized on a straight-line basis over 15
years.  The remaining identifiable intangible assets of $152.9 million
are being amortized on a straight-line basis over 10 to 25 years
(weighted-average life of 24 years).  Goodwill, which represents the
excess of the purchase price over the fair value of the net assets
acquired, was $814.2 million and is being amortized on a straight-line
basis over 30 years.  The amortization of identifiable intangible
assets and goodwill directly associated with the Nellcor acquisition
was $48.9 million for 1998.  Since the results of Nellcor have only
been included in the Company's consolidated results since September
1997, the amortization for 1998 represented ten months of activity.
The Company also recorded a deferred tax liability of $211.0 million,
representing the tax effect of timing differences recorded as part of
the acquisition.

The Company's most significant divestitures were the animal health
business and flavors joint venture in 1997 and the sale of the
catalysts and chemical additives and Aero Systems divisions in 1998
and early in 1999.  The Company now operates predominantly in the
healthcare industry and is comprised of three business segments -
Respiratory, Imaging and Pharmaceuticals.

The Company incurred a loss from continuing operations of $268.4
million, or $3.69 per share, for 1998 due to nonrecurring acquisition
and integration charges related to the acquisition of Nellcor which
totaled $449.3 million, $398.8 million net of taxes or $5.47 per
share.  The nonrecurring noncash acquisition charges were purchased
research and development and inventory stepped up to fair value.

The purchased research and development valued at $308.3 million was
charged to operations during the first quarter of 1998.  The
components of purchased research and development by business were
pulse oximetry including perinatal - $194 million; hospital
ventilators - $45 million; oxygen therapy - $20 million; and sleep,
alternate care and other - $49 million.  Of this amount, $306.3
million related to the Respiratory segment and $2.0 million related to
the Aero Systems division, which was sold and reclassified to
discontinued operations in the fourth quarter of 1998.

The purchased research and development represents the value of
numerous new medical devices and other products/technologies in all
major product lines that were in various stages of development and had
not reached technological feasibility at the transaction date.  No
alternative future uses were identified prior to reaching
technological feasibility because of the uniqueness of the projects.
Additionally, no identifiable alternate markets were established for
projects that were in early stages of development.

The most significant acquired projects, based upon discounted cash
flows, that were in-process at the date of acquisition were in pulse
oximetry and hospital ventilation.  Pulse oximetry, which includes
monitors, sensors, OEM and licensing, and related service for all
types of patients and environments including perinatal, generated
approximately 63 percent of purchased research and development value.
Pulse oximetry products provide the continuous measurement of arterial
oxygen saturation, pulse rate and pulse strength in a variety of
settings and for a spectrum of patients.  The most significant of the
pulse oximetry projects underway at the date of acquisition included a
new family of monitors and sensors that incorporate new light emitting
diode and detector component designs with enhanced motion tolerance
capability, packaging and integration of data storage features to
allow advanced performance, cost reduction, production automation,
size reduction and reduced power requirements.  In the area of fetal
pulse oximetry, the major products in development are expected to help
lower the risks involved in childbirth by reducing unnecessary
cesarean section deliveries.  The Company believes fetal pulse
oximetry can help clinicians make better informed decisions regarding
the status of a fetus during labor and delivery by providing
information that helps them determine if the fetus is adequately
oxygenated when the heart rate pattern is non-reassuring.  These
projects are expected to be complete and the related products
commercially available in the U.S. within three years of the
acquisition date with an expected cost to complete of approximately
$20 million.

The hospital ventilation projects generated approximately 15 percent
of the purchased research and development value.  Hospital ventilators
provide ventilation to patients requiring respiratory support.  The
most significant projects that were underway at the date of
acquisition were Models 840* and 740*/760* which were to provide
continuous respiratory support for a wide range of pediatric to adult
patients for a wide variety of clinical conditions.  The Model 840* is
a dual microprocessor controlled critical care ventilator for infant,
pediatric and adult patients who require either invasive or
noninvasive ventilation with features that include a graphic user
interface for viewing patient data and setting parameters and alarm
values.  The Model 740*/760* is a low cost critical care ventilator
with a new engine capable of operating with low power consumption.
The Model 760*, built on the 740* platform, has pressure and volume
control features.  The products were expected to be commercially
available within two years of the acquisition date with an estimated
cost to complete of approximately $8 million.  All three models
received FDA market clearance by December 1998.

Oxygen therapy represents the third largest business category of
projects in terms of purchased research and development value.  Oxygen
therapy covers the entire range of functions from oxygen concentrators
to portable liquid oxygen, to high pressure oxygen cylinder systems
and conservation devices.  The most significant projects underway at
the date of acquisition were liquid oxygen systems using cryogenics to
reduce the frequency of deliveries, and new oxygen concentrators with
features which include reduced noise levels, fewer parts, lighter
weight and lower cost to manufacture.  These projects are expected to
be complete and the related products commercially available within
four years of the acquisition date with an expected cost to complete
of approximately $12 million.

The major risks associated with timely completion and
commercialization of these products are to transform concepts into
designs that meet customer requirements, gain regulatory approval and
market clearance in the key markets, and ramp up the manufacturing
process once regulatory approval is obtained.

While the assembled work force was valued using the cost approach, the
Company took the following steps to determine the purchased research
and development, developed technology, and trademarks and trade name
values.  The projected net cash flows from each product line and new
product in development were determined based upon management's
estimates of future revenues and expected profitability related to the
product portfolio.  These cash flows were then discounted to their
present values.  The discount rate includes a rate of return which
accounts for the time value of money as well as the investment risk
factors to appropriately reflect the risks of realization of the cash
flows.  The projected net cash flows were discounted to present value
utilizing discount rates of 15 percent, 16 percent and 20 percent for
developed technology, purchased research and development, and
trademarks and trade names, respectively.  For the purchased research
and development, the discounted cash flows from in-process projects
were then reduced to reflect only the accomplishments made by Nellcor
toward the products' ultimate completion through the acquisition date.

The projected net cash flows were developed in the following manner.
Revenue assumptions were based upon the growth rates for markets
served and the estimated life of each product's technology.
Significant aggregate revenue growth as projected by the Company's
strategic marketing units for developed and in-process products
assumed increasing demand for medical devices, and the Company's
ability to maintain a significant share of the market.  The projected
revenues associated with in-process technology increase to $937
million in 2004 and then decline over subsequent years, while revenue
assumptions for the developed products remain relatively flat in 1999
as compared to 1998 and then begin to decline gradually in subsequent
periods.  The trademark and trade name cash flows were based upon the
revenues of both developed and in-process products and a 2 percent
royalty rate.  Costs of goods sold, expressed as a percent of revenue,
were expected to decrease from current projections of 48 percent to 43
percent over time.  Gross margins, as they relate inversely to costs
of goods sold as a percentage of revenue, were assumed to increase, in
the aggregate, over time due mainly to improving efficiency in the
manufacturing processes and more profitable products having a greater
impact on total sales.  Selling, general and administration expenses,
excluding depreciation and amortization, expressed as a percent of
revenues were estimated at 24 percent for all periods.  Maintenance
research and development expense, which includes routine changes,
additions and modifications undertaken after a product is introduced
to the market, was established at 2 percent of revenue for both
developed and in-process technologies for all periods.  An after-tax
cash flow was then calculated by deducting income tax expense and
contributory asset charges from operating income.

Results through 1998 were consistent with the underlying projections
and assumptions of revenues to be generated, estimated costs to
complete and completion dates for the in-process projects and acquired
technologies.  Material negative variations from the projected results
would impact the Company's expected return on its investment in
Nellcor, its future results of operations and financial position.  In
1998, the Company received market approval and launched the Model 740*
and Model 840* ventilators.  These products, although delayed
approximately three months from expected launch date, have been well
accepted in the market place.

The sale of Nellcor inventories, which as part of the purchase price
allocation were stepped up to fair value, decreased earnings by $75.4
million, $46.7 million net of taxes.  The pretax charges to the
Respiratory segment and Aero Systems division, which was sold and
reclassified to discontinued operations in the fourth quarter of 1998,
were $74.4 million and $1.0 million, respectively.

With the acquisition complete, the Company began integrating the
operations of Nellcor with those of Mallinckrodt's other businesses.
Management finalized and approved a Nellcor integration plan during
1998.  Accordingly, the Company recorded additional purchase
liabilities of $50.1 million, $30.8 million net of related tax
benefit, which were included in the acquisition cost allocation and
related goodwill.  In addition, the Company recorded pretax charges to
operations during 1998 of $68.6 million, $46.4 million net of taxes,
associated with exiting certain activities related to the operation of
Mallinckrodt prior to the acquisition of Nellcor and other integration
costs of the combined Company.

Excluding the nonrecurring acquisition and integration charges in
1998, the Company had earnings from continuing operations of $130.4
million, or $1.77 per share.  Included in these results are after-tax
charges of $8.5 million, or 12 cents per share, primarily to increase
reserves for Nellcor trade receivables and inventory.  Earnings from
continuing operations for 1997 were $175.2 million, or $2.33 per
share.

The year to year decline in earnings from continuing operations, after
excluding nonrecurring acquisition and integration charges, is
primarily attributable to selling price reductions and the dilutive
effect of the Nellcor acquisition-related intangible and goodwill
amortization expense and interest expense.  The aggregate purchase
price of Nellcor of approximately $1.9 billion was paid through use of
available cash and cash equivalents and additional borrowings.  The
resulting higher interest expense exceeded the operating earnings of
the Nellcor operations during 1998.  The competitive demand for
selling price reductions from healthcare customer buying groups
continued throughout 1998.  This trend, which is expected to continue,
had its most significant impact on the Company's Imaging segment where
the potential for generic competitive products and available
manufacturing capacity continue to cause lower prices.

The Company recorded a net loss for 1998 of $204.4 million, or $2.81
per share as compared to net earnings of $190.1 million, or $2.53 per
share during the prior year.  During 1998, the Company sold, or
committed to sell, its catalysts and chemical additives and Aero
Systems divisions.  The completed actions resulted in an after-tax
gain in 1998 of $68.9 million.  The sale of the remainder of the
catalysts and chemical additives division on July 31, 1998 resulted in
a gain to be included in the 1999 results of discontinued operations.
The gains on the completed sales and the results of operations for
these divisions have been reclassified to discontinued operations in
the fourth quarter of 1998 and, accordingly, prior year results have
also been reclassified.  Earnings, net of taxes, of these discontinued
operations were $11.4 million and $10.5 million for 1998 and 1997,
respectively.  During the third quarter of 1998, the Company recorded
an after-tax charge of $7.9 million related to settlement costs from
the sale of the animal health business in the prior year.  The net
loss for 1998 also included an after-tax noncash charge of $8.4
million, or 11 cents per share, for the early adoption of a new
standard of accounting related to previously capitalized start-up
costs.  The cumulative effect of the accounting change was recorded in
the fourth quarter, but was effective as of July 1, 1997.  Operating
earnings would have been reduced by $2.3 million after taxes or 3
cents per share had the Company not adopted the accounting change.

Net earnings for 1997 included a $270.6 million after-tax gain from
discontinued operations resulting from the March 31, 1997 disposition
of Fries & Fries, Inc., a wholly owned subsidiary which owned the
Company's 50 percent interest in Tastemaker, the flavors joint
venture, and a $269.4 million after-tax loss from discontinued
operations resulting from the sale of the animal health segment on
June 30, 1997.

Net sales for 1998 increased 39 percent to $2.37 billion compared with
$1.70 billion in 1997.  Sales to customers outside the U.S. were $792
million or 33 percent of total 1998 sales.  Excluding sales of
Nellcor, which was acquired at the end of August 1997, sales were
$1.69 billion which is equal to the prior year.  Excluding the
acquisition and integration charges discussed above, operating
earnings were $286.3 million, a decrease of $11.2 million or 4 percent
from the prior year.  Excluding the results of Nellcor and the
acquisition and integration charges discussed above, operating
earnings were $248.1 million or 17 percent below the 1997 results of
$297.5 million.  The decline in operating earnings was driven by
competitive price pressure in the Imaging segment and critical care
business.

OPERATING RESULTS
(In millions)

                                      1999       1998       1997
                                     ------     ------     ------
Net Sales
  Respiratory...................     $1,144     $  991     $  321
  Imaging.......................        776        760        802
  Pharmaceuticals...............        661        616        575
                                     -------    -------    -------
                                     $2,581     $2,367     $1,698
                                     =======    =======    =======

Operating earnings (loss)
  Respiratory...................     $  140     $  102     $   76
  Imaging.......................        120        124        164
  Pharmaceuticals...............        103         83         82
                                     -------    -------    -------
                                        363        309        322
  Corporate expense.............        (25)       (23)       (25)
  Acquisition and integration
   charges......................                  (449)
                                     -------    -------    -------
                                     $  338     $ (163)    $  297
                                     =======    =======    =======

1999 vs. 1998
-------------

Operating earnings for 1999 were $363 million, which is a 17 percent
improvement over the $309 million in 1998 excluding acquisition and
integration charges associated with the acquisition of Nellcor which
were discussed previously, and corporate expense.

The Respiratory segment, of which Nellcor is a part, had sales for
1999 of $1,144 million, or 15 percent greater than the sales recorded
for 1998.  The segment's sales increase of $153 million was
attributable to volume growth of 17 percent, of which 10 percent was
due to the inclusion of ten months of Nellcor revenue in 1998.  The 7
percent volume growth in the comparable September through June periods
included $97 million or 12 percent overall growth of pulse oximetry,
ventilation, service, anesthesiology and respiratory disposables,
blood analysis and medical gases.  Volume declines of $27 million
included $11 million associated with divested business and $16 million
in the oxygen therapy, sleep and portable ventilation lines of
business.  The volume declines in the on-going businesses were
primarily due to delayed new product introductions and competitive
pressures associated with customer third-party reimbursement on
existing products in these businesses.  Operating earnings of this
segment for 1999 were $140 million, or 37 percent greater than the
$102 million reported for the prior year.  The year to year
improvement was primarily attributable to the two additional months of
sales and higher sales volumes in product lines generating the highest
margins.

The Imaging segment's sales in 1999 were $776 million, or 2 percent
above the sales for the prior year.  The sales increase was
attributable to a $30 million increase in sales of nuclear medicine
products.  All major product lines contributed to the year over year
volume increase of 4 percent, which was offset by price erosion in x-
ray contrast media.  Although price declines of 5 percent in the x-ray
contrast media portion of the business in 1999 were less significant
when compared to those experienced in prior years, declines will
continue in future periods thus reducing profitability further.
Operating earnings for 1999 were $120 million, which is 4 percent
lower than in the prior year primarily as a result of selling price
erosion in x-ray contrast media.

The Pharmaceuticals segment's sales for 1999 were $661 million, or 7
percent above the revenues generated last year.  The sales increase of
$45 million was primarily attributable to volume increases in
narcotics and drug chemicals of $52 million, which was an increase of
17 percent.  Sales volumes of acetaminophen and laboratory and
microelectronic chemicals declined 5 percent and 6 percent,
respectively.  The decline in acetaminophen sales was primarily due to
a late flu season in the U.S., while the decline in laboratory and
microelectronic chemicals was primarily attributable to the weakness
in the microchip industry.  Price generated a 2 percent increase in
sales for the segment when compared to the prior year.  New
competitors are expected in narcotics manufacturing during 2000 which
may negatively impact selling prices.  Operating earnings for 1999
were $103 million, or 24 percent above prior year primarily as a
result of increased sales of higher margin products.

1998 vs. 1997
-------------

The Company's 1998 operating earnings excluding charges related to
acquisition and integration activities and corporate expense were $309
million, which represented a 4 percent decline when compared to the
prior year.  Excluding the results of Nellcor, acquired in August
1997, the acquisition and integration charges, and corporate expense,
operating earnings would have been $271 million or 16 percent below
1997.  This earnings decline was attributable to lower selling prices
which were only partially offset by higher volume.  The competitive
pressures and the demand for price discounts from customer buying
groups adversely affected earnings, and this trend is expected to
continue.  In response to this market trend, the Company entered into
a multi-year agreement in 1996 with Premier Purchasing Partners, L.P.
(Premier), the largest healthcare purchasing group in the United
States.  Effective July 1, 1997, Premier named Mallinckrodt a
corporate partner and, accordingly, Premier's 1,800 hospital and
healthcare facilities are provided incentives to use Mallinckrodt
products.

The Respiratory segment, which includes Nellcor and the critical care
business, reported operating earnings of $102 million, an increase of
34 percent over the results for 1997.  Excluding Nellcor, operating
earnings were $64 million, a 16 percent decrease from prior year.  The
year to year earnings decline was attributable to a sales decline of
$16 million resulting from the negative impact of exchange rate
movements caused by the strengthening of the U.S. dollar versus major
European currencies and the Japanese yen, $8 million due to price
declines and another $6 million attributable to the divestiture of a
product line in September 1996.  These sales shortfalls were only
partially offset by volume increases of $14 million and $11 million in
disposable respiratory and anesthesiology product lines, respectively.

The Imaging segment had operating earnings of $124 million in 1998,
which was a decline of $40 million or 24 percent from the prior year.
The decline in profitability was directly attributable to a sales
decline of $42 million - from $802 million in 1997 to $760 million in
1998.  All product lines had volume increases which represented an
increase of $85 million over the prior year.  In spite of these
increases, erosion of selling price accounted for a $102 million sales
decline.  The remainder of the shortfall in 1998 when compared to 1997
was attributable to the impact of exchange rate movements caused by
the strengthening of the U.S. dollar versus major European currencies
and the Japanese yen.  X-ray contrast media, the segment's most
significant product line, had sales volume increases of $44 million,
but price erosion reduced sales by $85 million.  The pricing pressures
were most significant in the U.S. where the Company and its x-ray
contrast media competitors utilize price concessions to maintain or
grow their shares in a market dominated by large customer buying
groups.  The agreement with Premier aligns the Company with the
largest healthcare purchasing group in the U.S., representing
approximately 30 percent of all x-ray contrast media purchased.  The
Premier agreement is believed to be the largest contract ever written
for these products.  In spite of cost reductions in x-ray contrast
media manufacturing and lower operating expenses, the price erosion
reduced profitability, and is expected to reduce profitability in
future periods but at a lower rate of decline than was experienced in
1998 and 1997.

The Pharmaceuticals segment, which includes bulk and dosage
pharmaceuticals, peptides, and process, laboratory and microelectronic
chemicals, had 1998 operating earnings of $83 million, which was $1
million or 1 percent above results for the prior year.  In spite of
higher sales, product mix, lower than expected sales of high margin
dosage and other specialty products, and the related impact on plant
efficiencies negatively impacted operating earnings.  Sales were $616
million, which represented an increase of $41 million or 7 percent
above 1997 results.  The sales increase was partially generated by a
$19 million increase in dosage analgesic volume, of which
approximately $7 million was attributable to the full year impact from
an acquisition in November 1996.  The remainder of the sales increase
was attributable to volume growth in all other product lines.  The
impact of buying groups is less evident in the Pharmaceuticals
segment.  Overall, this segment was able to maintain pricing at prior
year levels.

CORPORATE MATTERS

Corporate expense was up $2 million or 8 percent in 1999 over 1998,
excluding 1998 nonrecurring integration charges.  The current year
increase is primarily attributable to costs associated with the
development and implementation of a cost management and productivity
improvement program.  Corporate expense in 1998, excluding
nonrecurring integration charges, was $23 million or 7 percent below
the 1997 level.

Interest and other nonoperating income, net was only $1.5 million in
1999, compared with $14.8 million and $22.0 million in 1998 and 1997,
respectively.  In 1998 and 1997, the Company generated interest income
on cash proceeds from 1997 divestiture activities invested in interest
bearing securities.  These cash equivalents were utilized to acquire
Nellcor at the end of August 1997.

Interest expense in 1999 was $85.0 million, which is $16.8 million
below the $101.8 million for the prior year.  The reduction in
interest expense was attributable to lower outstanding debt, as
divestiture proceeds generated in 1999 and 1998 were partially used to
reduce short-term borrowing, and lower short-term borrowing costs.
The 1998 interest expense was $53.8 million higher than was recorded
in 1997, primarily a result of borrowings to purchase for cash all the
outstanding shares of common stock of Nellcor.

The Company's effective tax rate was 32.0 percent in 1999.  Excluding
the one-time noncash write-off of purchased research and development,
which related to the Nellcor acquisition and which had no tax benefit,
the Company's effective tax rate in 1998 was 32.7 percent.  The 1997
effective tax rate was 35.5 percent.

FINANCIAL CONDITION

The Company's financial resources are expected to continue to be
adequate to support existing businesses.  Since June 30, 1998, cash
and cash equivalents decreased $22.8 million.  Operations provided
$193.6 million of cash, while capital spending totaled $116.9 million.
The Company received $75.4 million in proceeds from asset disposals
and $89.8 million in proceeds from redemption and sale of investments.
The Company's current ratio at June 30, 1999 was 1.0:1.  Debt as a
percentage of invested capital was 51.5 percent at the end of 1999.

At June 30, 1999, the Company had a $1.0 billion private placement
commercial paper program.  The program is backed by a $1.0 billion
revolving credit facility expiring September 12, 2002.  The revolving
credit facility was reduced from $1.6 billion in September 1998.
There were no borrowings outstanding under the revolving credit
facility as of June 30, 1999.  Commercial paper borrowings under this
program were $160.3 million as of June 30, 1999.  Non-U.S. lines of
credit totaling $139.5 million were also available, and borrowings
under these lines amounted to $17.7 million at June 30, 1999.  The
non-U.S. lines are cancelable at any time.

In May 1999, a $500 million shelf debt registration was declared
effective and at June 30, 1999 the entire amount remained available.

The Company has $200 million aggregate principal amount of 5.99
percent notes, which mature in 2010, and are redeemable at the
election of the holder, in whole but not in part, at 100 percent of
the principal amount on January 14, 2000.  These notes have been
reclassified to short-term.

The Company's Board of Directors previously authorized repurchase of
47 million shares of common stock and additional repurchases not to
exceed cash outlays of $250 million.  Share repurchases under these
authorizations have totaled 39.8 million shares, including 3.0 million
shares during 1999.

Estimated capital spending for the year ending June 30, 2000 is
approximately $160 million.

Year 2000 Readiness Disclosure
------------------------------

The Year 2000 issue is the result of date-sensitive devices, systems
and computer programs that were deployed using two digits rather than
four to define the applicable year.  Any such technologies may
recognize a year containing "00" as the year 1900 rather than the year
2000.  If left unaddressed, this could result in a system failure or
miscalculations, under certain circumstances, causing disruptions of
operations including, among other things, a temporary inability to
process transactions or engage in similar normal business activities.

Mallinckrodt has developed and is implementing a comprehensive program
to address the Year 2000 issue.  The program has four major focus
areas:  information technology systems, non-information technology
systems, products, and key supplier and business partners.  Overall,
the Company has completed its assessment in the above described areas,
and has substantially completed required modifications, replacements
or conversions.

Information technology systems are hardware and software which support
business applications.  Year 2000 compliance for these systems
included modification and testing of existing systems and replacement
of certain systems with new technologies.  We believe required
modifications, replacements and testing of critical systems are
approximately 99 percent completed.

Non-information technology systems (embedded systems) are used in
research and development, manufacturing processes and facility
management systems.  We believe all remediation decisions, and
modifications and replacements deemed appropriate for critical items,
are completed.

Compliance status and applicable remediation steps for currently and
previously marketed products have been communicated via the Internet
using a dedicated web page.  Modifications necessary to achieve
remediation for such products are available to customers in accordance
with the above communicated remediation steps.

The Company is also assessing the readiness of its key suppliers and
business partners to be Year 2000 compliant.  Information requests
have been distributed and responses received from virtually all those
queried.  To augment these evaluations, more detailed reviews of
certain key suppliers and business partners are being conducted.  This
part of the program is approximately 98 percent complete and, to date,
no matters have been identified from the replies received that would
appear to materially affect the operations of the Company's
businesses.

To further recognize potential adverse impact, the Company is
developing operating contingency plans to address unanticipated
interruptions that could occur in processes, systems and devices that
have been assessed, remediated and considered Year 2000 ready by
Mallinckrodt and its key suppliers and business partners.  Such
operating contingency plans are approximately 90 percent finished,
with completion expected by September 30, 1999.

The program to address Year 2000 has been underway since February
1997.  Both internal and external resources are being used to assess
and modify or replace non-compliant technologies, and to appropriately
test Year 2000 modifications and replacements.  The program is being
funded through operating cash flows.  The pretax costs incurred for
this effort were approximately $10 million, $7 million and $1 million
in 1999, 1998 and 1997, respectively.  In July through December 1999,
the Company anticipates an additional $2 million in pretax costs for
program management and to complete monitoring and evaluations of key
suppliers and business partners, program verification and contingency
planning.

The cost of the program and the date on which the Company believes it
will complete Year 2000 modifications are based on management's best
estimates.  If the modifications and conversions are not made or are
not completed timely and operating contingency plans do not work as
anticipated, the result could be an interruption, or a failure, of
certain normal business activities or operations.  Such failures could
materially impact and adversely affect the Company's results of
operation, liquidity and financial condition.  In addition,
disruptions in the economy generally resulting from Year 2000 issues
could materially and adversely affect the Company.

The Company presently believes it has an effective plan to anticipate
and resolve any potential Year 2000 issues in a timely manner, and
that, with the completion of the program as scheduled, the possibility
of a material interruption of normal operations should be reduced.

European Monetary Union (EMU)
-----------------------------

The euro was introduced on January 1, 1999, at which time the eleven
participating EMU member countries established fixed conversion rates
between their existing currencies (legacy currencies) and the euro.
The legacy currencies will continue to be valid as legal tender
through June 30, 2002; thereafter, the legacy currencies will be
canceled and euro bills and coins will be used for cash transactions
in the participating countries.

The Company's European sales offices and various manufacturing and
distribution facilities affected by the euro conversion have
established plans to address the systems issues raised by the euro
currency conversion.  The Company's legacy currency systems, which
have multi-currency functionality, were modified at minimal expense to
enable them to process euro transactions effective January 1, 1999.
The Company believes the cost of converting the information technology
and other systems to the euro will not be significant, and that such
conversions will be completed on a timely basis prior to any
anticipated negative impact on the Company's operations.  The Company
is cognizant of the potential business implications of converting to a
common currency; however, it is unable to determine, at this time, the
ultimate financial impact of the conversion on its operations, if any,
given that the impact will be dependent upon the competitive
situations which exist in the various regional markets in which the
Company participates and the potential actions which may or may not be
taken by the Company's competitors and suppliers.

Mallinckrodt believes converting to the euro will have no material
impact on the Company's currency exchange cost and/or risk exposure,
continuity of contracts or taxation.

ENVIRONMENTAL MATTERS

The Company is subject to various investigations, claims and legal
proceedings covering a wide range of matters that arise in the
ordinary course of its business activities.  In addition, the Company
is in varying stages of active investigation or remediation of, or is
addressing potential claims of, alleged or acknowledged contamination
at approximately 24 currently or previously owned or operated sites
and at approximately 16 off-site locations where its waste was taken
for treatment or disposal.

Once the Company becomes aware of its potential environmental
liability at a particular site, the measurement of the related
environmental liabilities to be recorded is based on an evaluation of
currently available facts such as the extent and types of hazardous
substances at a site, the range of technologies that can be used for
remediation, evolving standards of what constitutes acceptable
remediation, presently enacted laws and regulations, engineers and
environmental specialists' estimates of the range of expected clean-up
costs that may be incurred, prior experience in remediation of
contaminated sites, and the progress to date on remediation in
process.  While the current law potentially imposes joint and several
liability upon each party at a Superfund site, the Company's
contribution to clean up these sites is expected to be limited, given
the number of other companies which have also been named as
potentially responsible parties and the volumes of waste involved.  A
reasonable basis for apportionment of costs among responsible parties
is determined and the likelihood of contribution by other parties is
established.  If it is considered probable that the Company will only
have to pay its expected share of the total clean-up, the recorded
liability reflects the Company's expected share.  In determining the
probability of contribution, the Company considers the solvency of the
parties, whether responsibility is disputed, existence of an
allocation agreement, status of current action, and experience to date
regarding similar matters.  Current information and developments are
regularly assessed by the Company, and accruals are adjusted on a
quarterly basis, as required, to provide for the expected impact of
these environmental matters.

Most of the Company's environmental-related capital expenditures are
in response to provisions of the Federal Clean Air Act; Water
Pollution Control Act; Resource Conservation and Recovery Act; and
land use, air and water protection regulations of the various
localities and states, and their foreign counterparts.  Capital
expenditures worldwide relating to air emission control, wastewater
purification, land reclamation and solid waste disposal totaled
approximately $5 million in 1999, $6 million in 1998, and $6 million
in 1997.  The Company currently estimates that environmental capital
expenditures during 2000 and 2001 will be $10 million and $12 million,
respectively.

The Company had previously recognized the costs associated with the
investigation and remediation of Superfund sites, the litigation of
potential environmental claims, and the investigation and remedial
activities at the Company's current and former operating sites.
Related accruals of $128.8 million at June 30, 1999 are included in
current accrued liabilities and other noncurrent liabilities and
deferred credits.  Any claims for potential recovery from any sources
have not been valued against the accrued environmental liabilities.
While ongoing litigation may eventually result in recovery of costs
expended at certain of the environmental sites, any recovery is
contingent upon a successful outcome and has not been recognized in
the Company's results of operations.

The Company has recognized the costs and associated liabilities only
for those matters that are in its view probable and estimable.  Based
upon information currently available, management believes that
existing accrued liabilities are sufficient and that it is not
reasonably possible at this time that any additional liabilities will
result from the resolution of these matters that would have a material
adverse effect on the Company's consolidated results of operations or
financial position.

RISK MANAGEMENT STRATEGIES

The Company operates globally, with manufacturing and distribution
facilities in various countries throughout the world, and is subject
to certain opportunities and risks, including foreign currency
fluctuations and government actions.  Various operational initiatives
are employed to help manage business risks.  In the ordinary course of
business, Mallinckrodt purchases materials and sells finished products
denominated in approximately 25 different currencies.  The Company is
primarily exposed to changes in exchange rates of the German deutsche
mark and other Euro currencies, the Japanese yen and the Australian
dollar.  Overall, the Company is a net beneficiary when the U.S.
dollar weakens and is adversely affected by a stronger U.S. dollar
relative to the major currencies identified.

Operations in each country are monitored so that the Company can
quickly respond to changing economic and political environments as
well as changes in foreign currency exchange rates and interest rates.
The Company enters into forward foreign exchange contracts and
currency swaps to minimize the exposure on intercompany financing
transactions.  To minimize the impact of anticipated foreign currency
exposures which arise from probable purchases of raw materials or
other inventory, collection of accounts receivable, settlement of
accounts payable, and periodic debt service by international
subsidiaries which occur in the ordinary course of business, the
Company hedges a portion of its non-U.S. dollar denominated exposures
by purchasing currency options which generally have terms of two years
or less, and which have little or no intrinsic value at time of
purchase.  The Company uses the options with an objective of limiting
negative foreign exchange rate effects on overall performance for both
budget and prior year comparisons over a rolling 18- to 24-month
horizon.  The Company seeks to have effective coverage levels over
such 18- to 24-month horizon of 50 to 80 percent of currency exposures
that subject the Company to risk.  The hedges are designed to satisfy
the requirements for deferral accounting treatment at inception.
Gains and losses in the hedges are expected to be systematically
monetized with concurrent reinvestment to replace monetized hedges and
maintain overall hedging coverage targets.  The net impact of foreign
exchange activities on earnings was immaterial for 1999, 1998 and
1997, including conversion of certain currencies into functional
currencies and the costs of hedging certain transactions and balance
sheet exposures.  The foreign currency translation loss included in
accumulated other comprehensive loss in shareholders' equity, and
resulting from the translation of the financial statements of most of
the Company's international affiliates into U.S. dollars, increased by
$28.7 million in 1999 due to the strengthening of the U.S. dollar
against the functional currency of many of the Company's international
affiliates.

The Company's interest income and expense are most sensitive to
changes in the general level of U.S. interest rates.  In this regard,
changes in U.S. interest rates affect the interest earned on the
Company's cash equivalents and short-term investments as well as
interest paid on its short-term debt.  To manage the interest rate
characteristics of its outstanding debt to a more desirable fixed or
variable rate basis or to limit the Company's exposure to rising
interest rates, the Company periodically enters into interest rate
swaps and option contracts.

The Company does not consider the present general rate of inflation to
have a significant impact on the businesses in which it operates.

While future economic events cannot be predicted, the Company believes
its current operations and future expansion plans will not result in a
significantly different risk profile.

ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company has determined that its market risk exposures, which arise
primarily from exposures to fluctuations in interest rates and foreign
currency rates, are not material to its future earnings, fair value
and cash flows.

<PAGE>

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


Report of Independent Auditors.....................................33
Responsibility for Financial Reporting.............................34
Consolidated Statements of Operations..............................35
Consolidated Balance Sheets........................................36
Consolidated Statements of Cash Flows..............................37
Consolidated Statements of Changes in Shareholders' Equity.........38
Notes to Consolidated Financial Statements.........................39
Quarterly Results .................................................57

<PAGE>

REPORT OF INDEPENDENT AUDITORS

To the Shareholders and Board of Directors of Mallinckrodt Inc.

We have audited the accompanying consolidated balance sheets of
Mallinckrodt Inc. as of June 30, 1999 and 1998, and the related
consolidated statements of operations, changes in shareholders'
equity, and cash flows for each of the three years in the period ended
June 30, 1999, appearing on pages 35 through 56.  These consolidated
financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Mallinckrodt Inc. at June 30, 1999 and 1998, and
the consolidated results of its operations and its cash flows for each
of the three years in the period ended June 30, 1999, in conformity
with generally accepted accounting principles.

As discussed in Note 1 to the consolidated financial statements, in
the year ended June 30, 1998, the Company adopted Statement of
Position 98-5, "Reporting on the Costs of Start-Up Activities."

Ernst & Young LLP
St. Louis, Missouri
July 29, 1999

<PAGE>

RESPONSIBILITY FOR FINANCIAL REPORTING

The consolidated financial statements included in this report are the
responsibility of management.  The statements have been prepared in
conformity with generally accepted accounting principles and include
amounts based on our best estimates and judgments.  Financial
information appearing elsewhere in this report is consistent with that
in the financial statements.

Management is also responsible for maintaining systems of internal
accounting control with the objectives of providing reasonable
assurance at reasonable cost that the Company's assets are safeguarded
against material loss from unauthorized use or disposition and that
transactions are properly authorized and recorded to permit reliance
on the Company's financial data and records.  In addition, the Company
maintains a program for communicating corporate policy throughout the
organization and, as a further safeguard, an internal audit staff
monitors compliance with policies and systems of internal accounting
control.

Mallinckrodt's consolidated financial statements have been audited by
Ernst & Young LLP.  To express their opinion as to the fairness of the
statements in conformity with generally accepted accounting
principles, the independent auditors review and evaluate
Mallinckrodt's accounting controls and conduct such tests and other
procedures as they deem necessary.  The Audit Committee of the Board
of Directors regularly meets with the independent auditors, without
management present, to review financial reporting matters, and audit
and control functions.



Douglas A. McKinney
Vice President and Controller
July 29, 1999



Michael A. Rocca
Senior Vice President and Chief Financial Officer
July 29, 1999

<PAGE>

<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
<CAPTION>



                                                   Year Ended June 30,
                                            ---------------------------------
                                              1999        1998        1997
                                            ---------   ---------   ---------
<S>                                         <C>         <C>         <C>
Net sales................................   $2,581.2    $2,367.0    $1,698.1

Operating costs and expenses:
  Cost of goods sold.....................    1,379.9     1,368.8       897.9
  Selling, administrative and
   general expenses......................      722.5       715.0       409.7
  Purchased research and development.....                  306.3
  Research and development expenses......      152.2       149.0       100.5
  Other operating income, net............      (11.3)       (9.1)       (7.5)
                                            ---------   ---------   ---------
Total operating costs and expenses.......    2,243.3     2,530.0     1,400.6
                                            ---------   ---------   ---------

Operating earnings (loss)................      337.9      (163.0)      297.5
Interest and other nonoperating
 income, net.............................        1.5        14.8        22.0
Interest expense.........................      (85.0)     (101.8)      (48.0)
                                            ---------   ---------   ---------

Earnings (loss) from continuing
 operations before income taxes..........      254.4      (250.0)      271.5
Income tax provision.....................       81.5        18.4        96.3
                                            ---------   ---------   ---------

Earnings (loss) from continuing
 operations..............................      172.9      (268.4)      175.2
Discontinued operations..................       23.3        72.4        14.9
                                            ---------   ---------   ---------

Earnings (loss) before cumulative
 effect of accounting change.............      196.2      (196.0)      190.1
Cumulative effect of accounting change...                   (8.4)
                                            ---------   ---------   ---------

Net earnings (loss)......................      196.2      (204.4)      190.1
Preferred stock dividends................        (.4)        (.4)        (.4)
                                            ---------   ---------   ---------

Available for common shareholders........   $  195.8    $ (204.8)   $  189.7
                                            =========   =========   =========

Basic earnings per common share:
  Earnings (loss) from continuing
   operations............................   $   2.41    $  (3.69)   $   2.37
  Discontinued operations................        .32         .99         .20
  Cumulative effect of
   accounting change.....................                   (.11)
                                            ---------   ---------   ---------
  Net earnings (loss)....................   $   2.73    $  (2.81)   $   2.57
                                            =========   =========   =========
Diluted earnings per common share:
  Earnings (loss) from continuing
   operations............................   $   2.40    $  (3.69)   $   2.33
  Discontinued operations................        .32         .99         .20
  Cumulative effect of
   accounting change.....................                   (.11)
                                            ---------   ---------   ---------
  Net earnings (loss)....................   $   2.72    $  (2.81)   $   2.53
                                            =========   =========   =========

(The accompanying Notes are an integral part of the Consolidated Financial
Statements.)
</TABLE>
<PAGE>

<TABLE>
CONSOLIDATED BALANCE SHEETS
(In millions, except share and per share amounts)
<CAPTION>


                                                               June 30,
                                                       ----------------------
                                                          1999         1998
                                                       ---------    ---------
<S>                                                    <C>           <C>
ASSETS
Current assets:
  Cash and cash equivalents.........................   $   32.7     $   55.5
  Trade receivables, less allowances of
   $17.9 in 1999 and $16.7 in 1998..................      490.9        486.3
  Inventories.......................................      530.3        470.0
  Deferred income taxes.............................       54.7         95.2
  Other current assets..............................       61.3         61.5
  Net current assets of discontinued operations.....                     4.8
                                                       ---------    ---------
Total current assets................................    1,169.9      1,173.3

Investments and other noncurrent assets, less
 allowances of $8.6 in 1999 and $5.8 in 1998........       67.2        154.5
Property, plant and equipment, net..................      870.7        894.9
Goodwill, net.......................................      942.3        987.0
Technology, net.....................................      336.4        364.3
Other intangible assets, net........................      266.6        282.1
Net noncurrent assets of discontinued operations....                    12.4
Deferred income taxes...............................        4.3          4.6
                                                       ---------    ---------
Total assets........................................   $3,657.4     $3,873.1
                                                       =========    =========


LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Short-term debt...................................   $  383.8     $  311.4
  Accounts payable..................................      221.2        215.0
  Accrued liabilities...............................      459.5        532.0
  Income taxes payable..............................       77.3        122.3
  Deferred income taxes.............................        1.2          1.4
                                                       ---------    ---------
Total current liabilities...........................    1,143.0      1,182.1

Long-term debt, less current maturities.............      742.5        944.5
Deferred income taxes...............................      363.0        396.2
Postretirement benefits.............................      166.5        169.2
Other noncurrent liabilities and deferred credits...      182.0        175.2
                                                       ---------    ---------
Total liabilities...................................    2,597.0      2,867.2
                                                       ---------    ---------
Shareholders' equity:
  4 Percent cumulative preferred stock..............       11.0         11.0
  Common stock, par value $1, authorized
   300,000,000 shares; issued 87,124,773 shares.....       87.1         87.1
  Capital in excess of par value....................      314.7        315.2
  Reinvested earnings...............................    1,188.4      1,039.7
  Accumulated other comprehensive loss..............     (105.1)       (72.6)
  Treasury stock, at cost...........................     (435.7)      (374.5)
                                                       ---------    ---------
Total shareholders' equity..........................    1,060.4      1,005.9
                                                       ---------    ---------
Total liabilities and shareholders' equity             $3,657.4     $3,873.1
                                                       =========    =========


(The accompanying Notes are an integral part of the Consolidated Financial
Statements.)

</TABLE>

<PAGE>
<TABLE>

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
<CAPTION>


                                                     Year Ended June 30,
                                             ---------------------------------
                                               1999        1998         1997
                                             ---------   ---------   ---------
<S>                                          <C>         <C>         <C>
CASH FLOWS - OPERATING ACTIVITIES
Net earnings (loss)......................... $ 196.2     $ (204.4)   $ 190.1
Adjustments to reconcile net earnings
 (loss) to net cash provided by
 operating activities:
  Depreciation..............................   130.6        114.3       97.5
  Amortization..............................    84.5         75.3       30.2
  Postretirement benefits...................    (2.6)         6.3        7.9
  Undistributed equity in earnings
   of joint venture.........................                           (17.0)
  Gains on asset disposals..................   (39.7)      (114.3)    (182.5)
  Deferred income taxes.....................    13.6        (75.8)     144.1
  Write-off of purchased research
   and development..........................                308.3
  Sale of inventory stepped up to
   fair value at acquisition................                 75.4
  Write-off of pre-operating costs..........                 12.5
                                             --------    ---------   --------
                                               382.6        197.6      270.3
  Changes in operating assets and
   liabilities:
    Trade receivables.......................    (9.2)       (15.6)     (34.3)
    Inventories.............................   (62.2)       (18.1)      17.8
    Other current assets....................     4.5         63.8      (62.0)
    Accounts payable, accrued liabilities
     and income taxes payable, net..........  (112.2)       (15.8)     111.6
    Net assets of discontinued operations...                  (.4)       9.8
    Other noncurrent liabilities and
     deferred credits.......................     8.1         30.6       (4.3)
    Other, net..............................   (18.0)         1.3       (7.6)
                                             --------    ---------   --------
Net cash provided by operating activities...   193.6        243.4      301.3
                                             --------    ---------   --------

CASH FLOWS - INVESTING ACTIVITIES
Capital expenditures........................  (116.9)      (142.7)    (109.5)
Acquisition spending........................    (3.5)    (1,790.9)      (3.5)
Proceeds from asset disposals...............    75.4        308.2      412.8
Proceeds from redemption and sale
 of investments.............................    89.8          8.8         .8
Purchase of investments and
 intangible assets..........................   (11.5)       (17.0)     (18.3)
                                             --------    ---------   --------
Net cash provided (used) by
 investing activities.......................    33.3     (1,633.6)     282.3
                                             --------    ---------   --------

CASH FLOWS - FINANCING ACTIVITIES
Increase (decrease) in notes payable........  (126.2)       279.5     (103.8)
Proceeds from long-term debt................                399.8        1.1
Payments on long-term debt..................    (8.1)        (3.9)     (10.2)
Issuance of common stock....................     6.1         20.2       39.6
Acquisition of treasury stock...............   (74.0)        (9.7)    (149.9)
Dividends paid..............................   (43.9)       (48.5)     (48.2)
Redemption of common stock purchase rights..    (3.6)
                                             --------    ---------   --------
Net cash provided (used) by financing
 activities.................................  (249.7)       637.4     (271.4)
                                             --------    ---------   --------

Increase (decrease) in cash and
 cash equivalents...........................   (22.8)      (752.8)     312.2
Cash and cash equivalents at
 beginning of year..........................    55.5        808.3      496.1
                                             --------    ---------   --------
Cash and cash equivalents at end of year.... $  32.7     $   55.5    $ 808.3
                                             ========    =========   ========

(The accompanying Notes are an integral part of the Consolidated Financial
Statements.)

</TABLE>

<PAGE>
<TABLE>

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(In millions, except per share amounts)
<CAPTION>

                                                       Capital in
                                Preferred    Common    Excess of
                                  Stock      Stock     Par Value
                                ---------    ------    ---------
<S>                             <C>          <C>       <C>
BALANCE, JUNE 30, 1996........   $ 11.0      $ 87.1     $ 283.5
Comprehensive income (loss):
  Net earnings................
  Foreign currency
   translation................
  Unrealized gain on
   investments................
  Comprehensive income........
Cash dividends:
  4 percent cumulative
   preferred stock ($4.00 per
   share).....................
  Common stock ($.65 per
   share).....................
Stock option exercises........                              6.7
Income tax benefit from stock
  options exercised...........                              5.7
Issuance of stock related to
  an acquisition..............                             10.0
Acquisition of treasury
 stock........................
                                ---------    ------    ---------

BALANCE, JUNE 30, 1997........     11.0        87.1       305.9
Comprehensive income (loss):
  Net loss....................
  Foreign currency
   translation................
  Unrealized loss on
   investments................
  Comprehensive loss..........
Cash dividends:
  4 percent cumulative
   preferred stock ($4.00 per
   share).....................
  Common stock ($.66 per
   share).....................
Stock option exercises........                              1.6
Income tax benefit from stock
 options exercised............                              2.1
Acquisition of treasury
 stock........................
Investment plan match.........                              2.4
Stock awards..................                              3.2
                                ---------    ------    ---------

BALANCE, JUNE 30, 1998........     11.0        87.1       315.2
Comprehensive income (loss):
  Net earnings................
  Foreign currency
   translation................
  Unrealized loss on
   investments................
  Comprehensive income........
Cash dividends:
 4 percent cumulative
 preferred stock ($4.00 per
 share).......................
  Common stock ($.61 per
   share).....................
Redemption of common stock
 purchase rights ($.05 per
 share).......................
Stock option exercises........                             (1.2)
Income tax benefit from
 stock options exercised......                               .9
Acquisition of treasury
 stock........................
Investment plan match.........                              (.2)
Stock awards..................
                                ---------    ------    ---------

BALANCE, JUNE 30, 1999........   $ 11.0      $ 87.1     $ 314.7
                                =========    ======    =========

<CAPTION>
                                             Accumulated
                                                Other
                               Reinvested   Comprehensive   Treasury
                                Earnings         Loss        Stock     Total
                               ----------   -------------   --------  ---------
<S>                            <C>          <C>             <C>       <C>
BALANCE, JUNE 30, 1996........  $1,150.7       $ (15.3)     $(284.8)   $1,232.2
Comprehensive income (loss):
  Net earnings................     190.1                                  190.1
  Foreign currency
   translation................                   (35.2)                   (35.2)
  Unrealized gain on
   investments................                      .6                       .6
                                                                       ---------
  Comprehensive income........                                            155.5
                                                                      ----------
Cash dividends:
  4 percent cumulative
   preferred stock ($4.00 per
   share).....................       (.4)                                   (.4)
  Common stock ($.65 per
   share).....................     (47.8)                                 (47.8)
Stock option exercises........                                 27.2        33.9
Income tax benefit from stock
  options exercised...........                                              5.7
Issuance of stock related to
 an acquisition...............                                 12.0        22.0
Acquisition of treasury
 stock........................                               (149.9)     (149.9)
                               ----------     ---------     --------   ---------

BALANCE, JUNE 30, 1997........   1,292.6         (49.9)      (395.5)    1,251.2
Comprehensive income (loss):
  Net loss....................    (204.4)                                (204.4)
  Foreign currency
   translation................                   (21.1)                   (21.1)
  Unrealized loss on
   investments................                    (1.6)                    (1.6)
                                                                       ---------
  Comprehensive loss..........                                           (227.1)
                                                                       ---------
Cash dividends:
  4 percent cumulative
   preferred stock ($4.00 per
   share).....................       (.4)                                   (.4)
  Common stock ($.66 per
   share).....................     (48.1)                                 (48.1)
Stock option exercises........                                 16.5        18.1
Income tax benefit from stock
 options exercised............                                              2.1
Acquisition of treasury
 stock........................                                 (9.7)       (9.7)
Investment plan match.........                                  7.3         9.7
Stock awards..................                                  6.9        10.1
                               ----------     ---------     --------   ---------

BALANCE, JUNE 30, 1998........   1,039.7         (72.6)      (374.5)   1,005.9
Comprehensive income (loss):
  Net earnings................     196.2                                  196.2
  Foreign currency
   translation................                   (28.7)                   (28.7)
  Unrealized loss on
   investments................                    (3.8)                    (3.8)
                                                                       ---------
  Comprehensive income........                                            163.7
                                                                       ---------
Cash dividends:
  4 percent cumulative
   preferred stock ($4.00 per
   share).....................       (.4)                                   (.4)
  Common stock ($.61 per
   share).....................     (43.5)                                 (43.5)
Redemption of common stock
 purchase rights ($.05 per
 share).......................      (3.6)                                  (3.6)
Stock option exercises........                                  6.4         5.2
Income tax benefit from stock
 options exercised............                                               .9
Acquisition of treasury
 stock........................                                (74.0)      (74.0)
Investment plan match.........                                  6.2         6.0
Stock awards..................                                   .2          .2
                               ----------     ---------     --------   ---------

BALANCE, JUNE 30, 1999          $1,188.4       $(105.1)     $(435.7)   $1,060.4
                               ==========     =========     ========   =========

(The accompanying Notes are an integral part of the Consolidated Financial
Statements.)
</TABLE>
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Mallinckrodt Inc. and its subsidiaries, collectively, are called the
"Company" or "Mallinckrodt."  All references to years are to fiscal
years ended June 30 unless otherwise stated.  The 1998 consolidated
financial statements were restated for a reduction in purchased
research and development and a corresponding increase in goodwill,
which resulted in an increase in amortization expense.  Disclosures
relate to continuing operations, unless otherwise stated.  Certain
amounts in prior years were reclassified to conform to the current
year presentation.  All earnings per share amounts are calculated on a
diluted basis unless otherwise stated.

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

Financial statements of all majority owned subsidiaries are
consolidated.  Investments in 20 to 50 percent owned affiliates are
reported on the equity method.  Intercompany transactions are
eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements, and the revenues and expenses during
the reporting period, as well as amounts included in the Notes.  While
the Company uses its best estimates and judgments, actual results
could differ from these estimates.

Foreign Currency Translation

The financial statements of most of the Company's international
affiliates are translated into U.S. dollars using current exchange
rates for balance sheets and weighted-average rates for income
statements.  Unrealized translation adjustments are included in
accumulated other comprehensive loss in shareholders' equity in the
Consolidated Balance Sheets.

The financial statements of international affiliates that operate in
hyperinflationary economies in certain Latin American countries are
translated at current and historical exchange rates, as appropriate.
Unrealized translation adjustments are included in operating results
for these affiliates.

Cash and Cash Equivalents

Cash and cash equivalents consist primarily of certificates of
deposit, time deposits and other short-term securities with maturities
of three months or less from the date of purchase.

Inventories

Inventories are valued at the lower of cost or market.  Cost for
inventories is determined on either an average or first-in, first-out
basis.

Investments

The Company's investments in marketable equity securities are
classified as "available-for-sale" and are carried at fair market
value, with the unrealized gains and losses included, net of income
taxes, in accumulated other comprehensive loss in shareholders' equity
in the Consolidated Balance Sheets.  Interest, dividends and realized
gains and losses on the sale of such securities are included in
interest and other nonoperating income, net.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost.  Depreciation is
based upon estimated useful lives of 10 to 45 years for buildings and
3 to 15 years for machinery and equipment, using principally the
straight-line method.

The Company recognizes impairment losses for long-lived assets to be
held and used whenever events or changes in circumstances indicate
that the carrying amount of the assets exceeds the sum of the expected
undiscounted future cash flows associated with such assets.  The
measurement of the impairment losses to be recognized is based on the
difference between the fair values and the carrying amounts of the
assets.  Long-lived assets held for sale are reported at the lower of
carrying amount or fair value less cost to sell.

Intangible Assets

The cost of product line or business acquisitions accounted for using
the purchase method is allocated first to identifiable assets and
liabilities based on estimated fair values.  The excess of cost over
identifiable assets and liabilities is recorded as goodwill.

Goodwill is amortized on a straight-line basis over 10 to 40 years
(weighted-average life of 29 years).  Technology is amortized on a
straight-line basis over 15 to 25 years (weighted-average life of 16
years).  Other intangible assets, consisting primarily of trademarks,
trade names, and manufacturing and distribution agreements, are
amortized primarily on a straight-line basis over 3 to 40 years
(weighted-average life of 20 years).

The carrying amounts of intangible assets and goodwill are routinely
reviewed to determine if facts and circumstances suggest that they may
be impaired.  If this review indicates that the carrying amounts of
intangible assets and goodwill will not be recoverable, as determined
based on the estimated undiscounted cash flows of the entity acquired
over the remaining amortization period, the carrying amounts of the
intangible assets and goodwill are reduced by the estimated shortfall
of cash flows.  In addition, intangible assets and goodwill associated
with assets acquired in a purchase business combination are included
in impairment evaluations when events and circumstances exist that
indicate the carrying amount of those assets may not be recoverable.

Derivative Financial Instruments

The Company uses interest rate swaps and options to manage the
interest rate characteristics of its outstanding debt to a more
desirable fixed or variable rate basis or to limit the Company's
exposure to rising interest rates; forward foreign exchange agreements
and currency swaps to minimize the exposure on intercompany financing
transactions; and foreign exchange option contracts to minimize the
impact of anticipated foreign currency exposures which arise from
probable purchases of raw materials or other inventory, collection of
accounts receivable, settlement of accounts payable, and periodic debt
service by international subsidiaries which occur in the ordinary
course of business.

Interest rate differentials to be paid or received as a result of an
interest rate swap are accrued and recognized as an adjustment of
interest expense related to the designated debt.  Interest rate option
premiums paid are amortized to interest expense ratably during the
life of the agreement.  Amounts related to interest rate swaps and the
intrinsic value of terminated option agreements are deferred and
amortized as an adjustment to interest expense over the original
period of interest exposure, provided the designated liability
continues to exist or is probable of occurring.

The Company uses forward foreign exchange contracts and currency swaps
to hedge intercompany financial activity denominated in currencies
other than the functional currency of the entity involved.  Forward
foreign exchange contracts and currency swaps are carried off-balance-
sheet with unrealized and realized gains and losses included in the
measurement and recording of the hedged transactions.

The Company hedges a portion of its anticipated foreign currency
exchange exposure using certain derivative financial instruments,
primarily purchased options to sell foreign currencies with little or
no intrinsic value at time of purchase.  These contracts are
designated and effective as hedges of the Company's consolidated
foreign currency exchange exposures.  Gains on option contracts that
are designated as hedges (including open, matured and terminated
contracts), and which have nominal intrinsic value at the time of
purchase, are deferred and recognized in earnings at the time the
underlying hedged exposure occurs.  Premiums on purchased options are
recorded as assets and amortized over the lives of the options.
Realized and unrealized gains on options relating to exposures that
are no longer probable of occurring are included as foreign exchange
gains in other operating income, net in the accompanying Consolidated
Statements of Operations.

Revenue Recognition and Product Warranty

The Company recognizes revenue at the time of product shipment and
provides currently for estimated discounts, rebates, product returns,
and the cost to repair or replace products under the warranty
provisions in effect at the time of sale.

Stock-Based Compensation

The Company accounts for its stock-based compensation plans using the
intrinsic value method prescribed by Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees." Financial
Accounting Standards Board (FASB) Statement No. 123, "Accounting for
Stock-Based Compensation" (SFAS 123), requires that companies electing
to continue using the intrinsic value method make pro forma
disclosures of net earnings and earnings per share as if the fair-
value-based method of accounting had been applied.  See Note 17 for
the fair value disclosures required under SFAS 123.

Advertising Costs

All advertising costs are expensed as incurred and included in
selling, administrative and general expenses.  Advertising expense was
$20.0 million, $20.1 million and $20.5 million in 1999, 1998 and 1997,
respectively.

Recent Accounting Pronouncements

Adopted

In April 1998, the American Institute of Certified Public Accountants
(AICPA) issued SOP 98-5, "Reporting on the Costs of Start-Up
Activities" (SOP 98-5), which requires that costs related to start-up
activities be expensed as incurred.  Prior to 1998, the Company
capitalized its pre-operating costs incurred in connection with
opening a new facility.  In the fourth quarter of 1998, the Company
elected to early adopt the provisions of SOP 98-5 in its consolidated
financial statements for the year ended June 30, 1998.  The effect of
adoption of SOP 98-5 was to record a charge of $8.4 million, net of
taxes, for the cumulative effect of an accounting change to expense
costs that had previously been capitalized prior to July 1, 1997.

In February 1998, the FASB issued Statement No. 132, "Employers'
Disclosures about Pensions and Other Postretirement Benefits" (SFAS
132), which revises the disclosure requirements for employers'
pensions and other retiree benefits.  Mallinckrodt has adopted SFAS
132 in 1999 and the required disclosures are presented in Note 14.

In June 1997, the FASB issued Statement No. 131, "Disclosures About
Segments of an Enterprise and Related Information" (SFAS 131).  This
statement establishes standards for the reporting of information about
operating segments in annual and interim financial statements and
requires restatement of prior year information.  SFAS 131 defines
operating segments as components of an enterprise for which separate
financial information is available that is evaluated regularly by the
chief operating decision maker(s) in deciding how to allocate
resources and in assessing performance.  SFAS 131 also requires
disclosures about products and services, geographic areas and major
customers.  The adoption of SFAS 131 in 1999 did not affect results of
operations or financial position but did affect the disclosure of
segment information, as presented in Note 18.

In June 1997, the FASB issued Statement No. 130, "Reporting
Comprehensive Income" (SFAS 130).  This statement establishes new
standards for the reporting and display of comprehensive income and
its components.  The adoption of SFAS 130 in the first quarter of 1999
did not affect the Company's results of operation or financial
position but did affect the presentation of information.  Mallinckrodt
has disclosed the required information in the Consolidated Statements
of Changes in Shareholders' Equity and in Note 15.

Yet-to-be-Adopted

FASB Statement No. 133, "Accounting for Derivative Instruments and
Hedging Activities" (SFAS 133), is required to be adopted in years
beginning after June 15, 2000.  This statement will require the
Company to recognize all derivatives on the balance sheet at fair
value.  Derivatives that are not hedges must be adjusted to fair value
through income.  If the derivative is a hedge, depending on the nature
of the hedge, changes in the fair value of the derivative will either
be offset against the change in fair value of the hedged assets,
liabilities or firm commitments through earnings or recognized in
other comprehensive income until the hedged item is recognized in
earnings. Hedge ineffectiveness, the amount by which the change in the
value of a hedge does not exactly offset the change in the value of
the hedged item, will be immediately recognized in earnings.  The
Company continues to evaluate alternative hedging strategies and their
corresponding effects under SFAS 133 on the future consolidated
results of operations and financial position.

NOTE 2 - CHANGES IN BUSINESS

Acquisitions

NELLCOR PURITAN BENNETT INCORPORATED

On August 28, 1997, the Company acquired Nellcor Puritan Bennett
Incorporated (Nellcor) through an agreement to purchase for cash all
of the outstanding shares of common stock of Nellcor for $28.50 per
share.  The aggregate purchase price of the Nellcor acquisition was
approximately $1.9 billion.  The Company completed the acquisition
using cash and cash equivalents and borrowed approximately $1.1
billion under a $2.0 billion credit facility established in July 1997,
and amended and restated in September 1997.

The acquisition was accounted for under the purchase method of
accounting and, accordingly, the results of operations of Nellcor have
been included in the Company's consolidated financial statements since
September 1, 1997.  The purchase price of the acquisition was
allocated to the assets acquired and liabilities assumed based upon
generally accepted accounting principles and estimated fair values at
the date of acquisition.  The excess of the purchase price over the
fair value of the net identifiable assets, totaling $814.2 million,
was allocated to goodwill and is being amortized on a straight-line
basis over 30 years.  The Company also recorded a deferred tax
liability of $211.0 million, representing the tax effect of timing
differences recorded as part of the acquisition.

Approximately $835.4 million of the purchase price was allocated to
identifiable intangible assets including purchased research and
development of $308.3 million, technology of $374.2 million, and
trademarks and trade names and assembled work force of $152.9 million.
(See Note 1 for amortization periods and methods for intangible
assets.)

The purchased research and development represents the value of
numerous new medical devices and other  products/technologies underway
in all major product lines of Nellcor that were in various stages of
development and had not reached technological feasibility at the
transaction date.  No alternative future uses were identified prior to
reaching technological feasibility because of the uniqueness of the
projects.  Additionally, no identifiable alternate markets were
established for projects that were in early stages of development.
The major risks associated with timely completion and
commercialization are to transform concepts into designs that meet
customer requirements, gain regulatory approval and market clearance
in the key markets, and ramp up the manufacturing process once
regulatory approval is obtained.  Management is primarily responsible
for estimating the fair value of purchased research and development.
To determine the value of the purchased research and development, the
expected future net cash flows of the in-process technology were
determined based on forecasts of future results as of the acquisition
date for each project that management believed at the acquisition date
were likely to occur.  The projected net cash flows were discounted at
a rate which accounts for the time value of money as well as the risks
of realization of the cash flows.  The discounted cash flows were then
reduced to reflect only the accomplishment made by Nellcor through the
acquisition date toward the products' ultimate completion.  The
assumptions used in determining the value of purchased research and
development represented management's good faith best estimates of the
in-process products' likely performance as of the acquisition date.
The purchased research and development intangible asset, which had no
tax benefit, was charged to results of operations during the first
quarter of 1998.  Of the total charge of $308.3 million, $2.0 million
related to the Aero Systems division, which was sold and reclassified
to discontinued operations in the fourth quarter of 1998.

The sale of Nellcor inventories, which were stepped up to fair value
in connection with allocation of purchase price, decreased earnings by
$75.4 million, $46.7 million net of taxes for 1998.  Pretax charges to
the Respiratory segment and Aero Systems division, which was sold and
reclassified to discontinued operations in the fourth quarter of 1998,
were $74.4 million and $1.0 million, respectively.

OTHER

In November 1996, the Company acquired D.M. Graham Laboratories, Inc.,
a contract manufacturer of dosage pharmaceuticals and a licensed
producer of a variety of medicinal narcotics, for $22 million of the
Company's common stock.  This acquisition was accounted for under the
purchase method of accounting, and results of operations were included
in the consolidated financial statements from the acquisition date.
Results of operations for the periods prior to acquisition were not
material to Mallinckrodt.

Discontinued Operations

The Company sold certain chemical additive product lines in the second
quarter of 1998, and recorded a gain on sale, net of taxes, of $8.7
million.  In the fourth quarter of 1998, the Company sold its catalyst
business and Aero Systems division.  The catalyst sale resulted in a
gain, net of taxes, of $60.2 million.  No gain or loss was recognized
on the sale of the Aero Systems division, and there were no earnings
from operations.  In June 1998, the Company committed to the sale of
the remaining chemical additives business of the catalysts and
chemical additives division, and closing of the sale occurred on July
31, 1998.  This transaction resulted in a gain, net of taxes, of $23.3
million and earnings from operations were zero for the one month of
operations in 1999.  Certain liabilities for environmental, litigation
and employee benefits remained with the Company, and reserves were
established to address these liabilities as deemed appropriate.
Earnings, net of taxes, from the catalysts and chemical additives
division for 1999, 1998 and 1997 were zero, $11.4 million and $10.5
million, respectively.

On March 31, 1997, the Company disposed of Fries & Fries, Inc., a
wholly owned subsidiary which owned the Company's 50 percent interest
in Tastemaker, the flavors joint venture.  The Company recorded a gain
on divestiture, net of taxes, of $270.6 million.  Earnings, net of
taxes, from the divested business for 1997 were zero.  The disposition
included the assumption of $510 million of debt of Fries & Fries, Inc.
by the buyer.  Interest expense related to the assumed debt of $22.4
million for 1997 is included in the above Fries & Fries, Inc. net
after-tax results of operations reclassified to discontinued
operations.

On June 30, 1997, the Company sold the animal health segment for cash
plus the assumption of certain liabilities.  The Company recorded a
loss on sale, including taxes, of $269.4 million.  Certain
environmental liabilities, facility leases, and liabilities for
employee benefits, including postretirement benefits, remained with
the Company.  Reserves were established to address the remaining
liabilities.  Earnings, net of taxes, from the animal health segment
for 1997 were $5.8 million.  Interest expense related to debt assumed
by the buyer of $5.6 million for 1997  was included in the above
animal health segment net after-tax results reclassified to
discontinued operations.  During the third quarter of 1998, the
Company recorded a one-time, after-tax charge of $7.9 million to
discontinued operations related to settlement costs from the sale of
the animal health segment.

Discontinued operations for 1997 included other charges, primarily for
environmental and litigation costs related to previously divested
operations, of $2.6 million.

The following schedule summarizes the components, net of tax, of
discontinued operations presented in the Consolidated Statements of
Operations (in millions).

<TABLE>
<CAPTION>


                                                  1999       1998       1997
                                                 ------     ------     ------
<S>                                              <C>        <C>        <C>
Catalysts and chemical additives division
  Gain on sale..............................     $ 23.3     $ 68.9
  Earnings from operations..................                  11.4     $ 10.5
Fries & Fries, Inc.
  Gain on divestiture.......................                            270.6
Animal health segment.......................
  Loss on sale..............................                  (7.9)    (269.4)
  Earnings from operations                                                5.8
Other.......................................                             (2.6)
                                                 -------    -------    -------
Discontinued operations.....................     $ 23.3     $ 72.4     $ 14.9
                                                 =======    =======    =======

</TABLE>

The catalysts and chemical additives and Aero Systems divisions were
reclassified to discontinued operations effective June 30, 1998.
Fries & Fries, Inc. and the animal health segment were reclassified to
discontinued operations effective December 31, 1996 and March 31,
1997, respectively.  All prior periods of the Consolidated Statements
of Operations and Consolidated Balance Sheets were reclassified to
reflect this presentation.

Exit Activities and Restructuring Charges

Immediately after the acquisition of Nellcor was consummated,
management of the combined Company formulated an integration plan to
combine Mallinckrodt and Nellcor into one company.  Since both
companies (Mallinckrodt and Nellcor) had global healthcare operations,
senior management, through transition teams, assessed which activities
should be consolidated.  Management finalized and approved a Nellcor
integration plan during 1998.  Accordingly, the Company recorded
additional purchase liabilities during 1998 of $50.1 million, $30.8
million net of related tax benefit, which were included in the
acquisition cost allocation and related goodwill.  The principal
actions of the plan included the involuntary severance of
approximately 450 Nellcor employees as a result of work force
reduction primarily in U.S. administrative areas at a cost of $37.2
million, relocation of Nellcor employees at a cost of $3.8 million,
and the elimination of contractual obligations of Nellcor which had no
future economic benefit at a cost of $9.1 million.  The actual number
of employees terminated was 425.  Approximately $45.4 million of cash
expenditures were incurred through June 30, 1999 and liabilities of
$1.6 million related to the Nellcor integration plan remained in
accrued liabilities at June 30, 1999.  In June 1999, the estimated
liability was reduced by $3.1 million, $1.9 million net of related tax
benefit, with a corresponding $1.9 million reduction of goodwill
primarily as a result of reduced severance costs.  The remaining cash
expenditures will occur in 2000 and, although none are expected,
further reductions in the estimated liability for these integration
activities will be offset against the related goodwill.

During 1998, the Company recorded a pretax charge to selling,
administrative and general expenses of $19.1 million associated with
exiting certain activities related to Mallinckrodt operations.  The
charge included severance costs of $17.1 million related to the
involuntary severance of approximately 130 Mallinckrodt employees as a
result of work force reduction primarily in the Europe administration
function and U.S. sales force, and facility exit costs of $2.0 million.
The actual number of employees terminated was 115.  Approximately
$14.5 million of cash expenditures have been incurred through June 30,
1999.  In June 1999, the associated accrual was reduced by $.7 million
and credited to selling, administrative and general expenses.  The
remaining $3.9 million cash expenditures will occur in 2000.  No
further adjustments to the reserve are anticipated.

NOTE 3 - EARNINGS PER COMMON SHARE

The following table sets forth the computation of basic and diluted
earnings (loss) from continuing operations per common share (in
millions, except share and per share amounts).

<TABLE>
<CAPTION>

                                                 1999         1998       1997
                                               --------     -------     -------
<S>                                            <C>          <C>         <C>
Numerator:
 Earnings (loss) from continuing
  operations................................   $172.9       $(268.4)     $175.2
 Preferred stock dividends..................      (.4)          (.4)        (.4)
                                               -------      --------     -------
 Numerator for basic and diluted earnings
  (loss) per share--income (loss) available
  to common shareholders....................   $172.5       $(268.8)     $174.8
                                               =======      ========     =======

Denominator:
 Denominator for basic earnings (loss)
 per share--weighted-average shares....... 71,634,420    72,920,659  73,837,424
 Potential dilutive common shares--
  employee stock options..................    264,455                 1,270,405
                                           ----------    ----------  ----------
 Denominator for diluted earnings (loss)
  per share--adjusted weighted-average
  shares.................................. 71,898,875    72,920,659  75,107,829
                                           ==========    ==========  ==========

 Basic earnings (loss) from continuing
  operations per common share.............     $ 2.41       $ (3.69)     $ 2.37
                                               =======      ========     =======
 Diluted earnings (loss) from continuing
  operations per common share.............     $ 2.40       $ (3.69)     $ 2.33
                                               =======      ========     =======
</TABLE>


The diluted share base for the year ended June 30, 1998 excluded
incremental shares of 612,285 related to employee stock options.
These shares were excluded due to their antidilutive effect as a
result of the Company's loss from continuing operations during 1998.

NOTE 4 - SUPPLEMENTAL CASH FLOW INFORMATION
<TABLE>
<CAPTION>


(In millions)                                        1999       1998     1997
                                                   --------   -------   -------
<S>                                                <C>        <C>       <C>
Interest paid..................................    $ 87.3     $ 83.7    $ 69.1
Income taxes paid..............................     126.1       73.3      82.2
Noncash investing and financing activities:
 Assumption of liabilities related
  to acquisitions..............................       (.7)     465.6       2.3
 Issuance of stock for 401(k) employer
  matching contribution........................       6.0        9.7
 Stock awards..................................        .2       10.1
 Fair value gain (loss) adjustment to
  securities...................................      (6.1)      (2.5)       .6
 Assets acquired through capital leases........       1.4
 Principal amount of debt assumed by buyers
  in conjunction with divestitures.............                  1.0     530.6
 Preferred stock received related to a
  divestiture..................................                           88.9
 Issuance of stock related to an acquisition...                           22.0

</TABLE>

The interest paid and income taxes paid presented above include
amounts related to discontinued operations.

NOTE 5 - INVENTORIES

AT JUNE 30, (in millions)                           1999       1998
                                                   ------     ------
Raw materials and supplies....................     $208.3     $208.4
Work in process...............................       63.7       46.4
Finished goods................................      258.3      215.2
                                                   ------     ------
                                                   $530.3     $470.0
                                                   ======     ======

NOTE 6 - INVESTMENTS AND OTHER NONCURRENT ASSETS

AT JUNE 30, (in millions)                           1999       1998
                                                   ------     ------
Other investments, net........................     $ 42.2     $ 42.9
Other noncurrent assets, net..................       25.0       25.5
Preferred stock received related to a
 divestiture..................................                  86.1
                                                   ------     ------
                                                   $ 67.2     $154.5
                                                   ======     ======

NOTE 7 - PROPERTY, PLANT AND EQUIPMENT

AT JUNE 30, (in millions)                           1999       1998
                                                 ---------  ---------
Land and land improvements....................   $   85.0   $   85.6
Buildings and leasehold improvements..........      345.4      337.7
Machinery and equipment.......................      979.7      916.9
Construction in progress......................       48.9       71.3
                                                 ---------  ---------
                                                  1,459.0    1,411.5
Accumulated depreciation......................     (588.3)    (516.6)
                                                 ---------  ---------
                                                 $  870.7   $  894.9
                                                 =========  =========
Capitalized interest costs were $.9 million in 1999, $.8 million in
1998 and $.7 million in 1997.

NOTE 8 - INTANGIBLE ASSETS

AT JUNE 30, (in millions)                           1999       1998
                                                 ---------  ---------
Goodwill......................................   $1,071.0   $1,079.4
Accumulated amortization......................     (128.7)     (92.4)
                                                 ---------  ---------
Goodwill, net                                    $  942.3   $  987.0
                                                 =========  =========

Technology....................................   $  387.1   $  390.4
Accumulated amortization......................      (50.7)     (26.1)
                                                 ---------  ---------
Technology, net...............................   $  336.4   $  364.3
                                                 =========  =========

Other intangible assets.......................   $  337.6   $  337.4
Accumulated amortization......................      (71.0)     (55.3)
                                                 ---------  ---------
Other intangible assets, net..................   $  266.6   $  282.1
                                                 =========  =========

NOTE 9 - FINANCIAL INSTRUMENTS

Derivative Financial Instruments

In the ordinary course of business, Mallinckrodt purchases materials
and sells finished products denominated in approximately 25 different
currencies.  The Company is primarily exposed to changes in exchange
rates of the German deutsche mark and other Euro currencies, the
Japanese yen and the Australian dollar.  Overall, the Company is a net
beneficiary when the U.S. dollar weakens and is adversely affected by
a stronger U.S. dollar relative to the major currencies identified.

The Company enters into forward foreign exchange contracts and
currency swaps to minimize the exposure on intercompany financing
transactions.  To mitigate the short-term effect of changes in foreign
currency exchange rates on the Company's consolidated performance, the
Company hedges a portion of its non-U.S. dollar denominated exposures
by purchasing currency options which generally have terms of two years
or less.  The Company uses the currency options with an objective of
limiting negative foreign exchange rate effects on overall performance
for both budget and prior year comparisons over a rolling 18- to 24-
month horizon.  The Company seeks to have effective coverage levels
over such 18- to 24-month horizon of 50 to 80 percent of currency
exposures that subject the Company to risk.  There are no hedging
gains or losses that are explicitly deferred at June 30, 1999.

The Company's interest income and expense are most sensitive to
changes in the general level of U.S. interest rates.  In this regard,
changes in U.S. interest rates affect the interest earned on the
Company's cash equivalents and short-term investments as well as
interest paid on its short-term debt.  To mitigate the impact of
fluctuations in U.S. interest rates, the Company periodically enters
into interest rate swaps and option contracts.

Information on the duration by expected maturity, notional value,
purpose and fair value of instruments outstanding as of June 30, 1999
is provided below (in millions, except average strike price and
exchange rate):

<TABLE>
<CAPTION>
                                                                     Fair Value
                                                                       (Loss)
                                                                       As of
                                        2000     2001      Total      6/30/99
                                       ------   ------    -------    ----------
<S>                                    <C>      <C>       <C>        <C>

Purchased option contracts to sell
 for U.S.$ related to anticipated
 foreign currency exposures
  Australian dollar
   Notional value....................  $  6.5             $  6.5        $  .1
   Average strike price..............     .67
  German deutsche mark
   Notional value....................  $ 47.5             $ 47.5        $ 3.1
   Average strike price..............    1.75
  Japanese yen
   Notional value....................  $ 35.0   $ 14.0    $ 49.0        $ 2.6
   Average strike price..............   116.6    104.7

Forward contracts and currency
 swaps related to intercompany
 financial transactions
  Sale of Canadian dollar
   Notional value....................  $   .9             $   .9
   Exchange rate.....................    1.46
  Sale of Polish zloty
   Notional value....................  $   .4             $   .4
   Exchange rate.....................    4.22
  Purchase of Dutch guilder
   Notional value....................  $ 27.5             $ 27.5        $(1.2)
   Exchange rate.....................    2.06
  Purchase of Swedish krona
   Notional value....................  $ 63.0             $ 63.0        $ (.2)
   Exchange rate.....................    8.33
  Swap of Japanese yen
   Notional value....................           $ 12.9    $ 12.9        $(2.1)
   Exchange rate.....................            140.0

Interest rate swaps
  Related to U.S.$ leases, the
   Company pays fixed (9.9%)/receives
    variable(LIBOR + 0.70%)
     Notional value..................  $ 33.3             $ 33.3        $(1.2)
  Related to 6.3% debentures, the
   Company pays variable
   (LIBOR + .3419%)/receives
    fixed (6.3%)
     Notional value..................           $200.0    $200.0        $  .6

</TABLE>

Fair Value of Financial Instruments

Non-derivative financial instruments included in the Consolidated
Balance Sheets are cash, short-term investment vehicles, short-term
debt and long-term debt.  In the aggregate, these instruments were
carried at amounts approximating fair value at June 30, 1999 and 1998.
The fair value of long-term debt was estimated based on future cash
flows discounted at current interest rates available to the Company
for debt with similar maturities and characteristics.  See Note 13 for
the disclosure of fair value of long-term debt.

Concentrations of Credit Risk

Financial instruments which expose Mallinckrodt to credit risk are
short-term investments (cash equivalents), trade receivables and
derivatives.  The Company mitigates the risk that counterparties to
short-term investments and derivatives will fail to perform by
contracting only with major financial institutions having high credit
ratings.  Mallinckrodt considers the likelihood of counterparty
failure to be remote.

Trade receivables stem from the Company's worldwide operations and
reflect Mallinckrodt's diverse customer base.  The Company
periodically assesses the financial strength of its customers and
obtains proof of creditworthiness, as necessary, prior to extending
credit.  Consequently, Mallinckrodt does not have a material
concentration of credit risk, either by transaction type, product line
or geographic region.

NOTE 10 - INCOME TAXES

Income taxes included in the Consolidated Statements of Operations
were (in millions):

<TABLE>
<CAPTION>


                                                    1999       1998      1997
                                                   -------    -------   -------
<S>                                                <C>        <C>       <C>
Continuing operations..........................    $ 81.5     $ 18.4    $ 96.3
Discontinued operations:
  Sale of catalysts and chemical additives
   division....................................      13.7       45.4
  Catalysts and chemical additives division
   operations..................................                  5.3       6.0
  Divestiture of Fries & Fries, Inc............                          158.9
  Fries & Fries, Inc. operations...............                            (.5)
  Sale of animal health segment................                 (4.2)     21.9
  Animal health segment operations.............                           11.4
  Other........................................      (3.3)      (8.4)     (1.4)
                                                   -------    -------   -------
  Total discontinued operations................      10.4       38.1     196.3
                                                   -------    -------   -------
Cumulative effect of accounting change.........                 (4.1)
                                                   -------    -------   -------
                                                   $ 91.9     $ 52.4    $292.6
                                                   =======    =======   =======

</TABLE>

The geographical sources of earnings (loss) from continuing operations
before income taxes were (in millions):


                                     1999         1998      1997
                                    -------     --------   -------
U.S...........................      $141.8      $(355.8)   $161.7
Outside U.S...................       112.6        105.8     109.8
                                    -------     --------   -------
                                    $254.4      $(250.0)   $271.5
                                    =======     ========   =======

The components of the income tax provision charged to continuing
operations follow (in millions):

                                     1999         1998      1997
                                    -------      -------    ------
Current:
  U.S. federal................       $26.4        $53.3     $41.5
  U.S. state and local........         4.8          4.4       7.0
  Outside U.S.................        33.5         29.5      26.3
                                     ------       ------    ------
                                      64.7         87.2      74.8
                                     ------       ------    ------
Deferred:
  U.S. federal................        32.7        (87.5)      8.8
  U.S. state and local........        (2.9)        14.2       2.7
  Outside U.S.................       (13.0)         4.5      10.0
                                     ------       ------    ------
                                      16.8        (68.8)     21.5
                                     ------       ------    ------
                                     $81.5        $18.4     $96.3
                                     ======       ======    ======

The Company had the following deferred tax balances at June 30, 1999
and 1998 (in millions):

                                                 1999       1998
                                                -------    -------
Deferred tax assets:
  Restructuring accruals.....................   $ 14.5     $ 16.2
  Pensions and deferred compensation.........     21.6       20.2
  Net operating losses.......................     12.2       11.4
  Environmental accruals.....................     26.4       28.2
  Other, net.................................      3.8       44.1
                                                -------    -------
Gross deferred tax assets....................     78.5      120.1
Valuation allowance..........................    (29.0)     (30.4)
                                                -------    -------
Total deferred tax assets....................     49.5       89.7
                                                -------    -------
Deferred tax liabilities:
  Property, plant and equipment..............    114.4      133.9
  Receivables................................     22.9       18.8
  Intangible assets..........................    217.4      234.8
                                                -------    -------
Total deferred tax liabilities...............    354.7      387.5
                                                -------    -------
Net deferred tax liabilities.................   $305.2     $297.8
                                                =======    =======

The tax benefit of the Company's net operating loss carryforwards of
$12.2 million relates primarily to its non-U.S. operations, and $8.0
million of the tax benefit will expire in years 2000 through 2005.
The remaining $4.2 million of the tax benefit relates to net operating
loss carryforwards with indefinite carryforward periods.

Factors causing the effective tax rate for continuing operations to
differ from the U.S. federal statutory rate were (in millions):


                                     1999         1998      1997
                                    --------    -------    -------
Computed tax at the U.S.
 federal statutory rate..........   $ 89.0      $(87.5)    $ 95.0
State income taxes, net of
 federal benefit.................      1.2        12.1        6.6
Effect of foreign operations.....    (13.4)      (14.4)     (15.8)
Purchase accounting..............                107.2
Goodwill amortization............     11.4        10.4        1.9
Other items......................     (6.7)       (9.4)       8.6
                                    -------     -------    -------
Income tax provision.............   $ 81.5      $ 18.4     $ 96.3
                                    =======     =======    =======

Effective tax rate...............    32.0%      (7.4)%      35.5%

Undistributed earnings of certain subsidiaries outside the U.S. are
considered to be permanently invested.  Accordingly, no provision for
income taxes was made for undistributed earnings of such subsidiaries,
which aggregated $341.0 million at June 30, 1999.

NOTE 11 - ACCRUED LIABILITIES

AT JUNE 30, (in millions)                        1999       1998
                                                ------     ------
Compensation and benefits....................   $131.9     $118.1
Environmental liabilities....................     81.0       79.5
Other........................................    246.6      334.4
                                                ------     ------
                                                $459.5     $532.0
                                                ======     ======

NOTE 12 - LINES OF CREDIT

The Company has a $1.0 billion private placement commercial paper
program.  The program is backed by a $1.0 billion revolving credit
facility expiring September 12, 2002.  Under this facility, interest
rates on borrowings are based upon the London Interbank Offered Rate,
plus a margin dependent on the Company's senior debt rating.  There
was no borrowing outstanding under the revolving credit facility at
June 30, 1999.  Commercial paper borrowings under this program were
$160.3 million as of June 30, 1999.

Non-U.S. lines of credit totaling $139.5 million were also available,
and borrowings under these lines amounted to $17.7 million at June 30,
1999.  These non-U.S. lines are cancelable at any time.

NOTE 13 - DEBT

The components of short-term debt at June 30, 1999 and 1998 were (in
millions):

AT JUNE 30, (in millions)                        1999       1998
                                                ------     ------
Notes payable................................   $180.1     $303.4
Current maturities of long-term debt.........    203.7        8.0
                                                ------     ------
                                                $383.8     $311.4
                                                ======     ======

The weighted-average interest rates on short-term borrowings at June
30, 1999 and 1998 were 5.0 percent and 5.8 percent, respectively.

The components of long-term debt at June 30, 1999 and 1998 were (in
millions):

<TABLE>
<CAPTION>

                                    Fair Value             Carrying Amount
                                --------------------     --------------------
                                  1999       1998           1999       1998
                                --------    --------     --------    --------
<S>                             <C>         <C>          <C>         <C>
9.875% debentures with
 initial payment of $.9
 million due 2002 and
 annual installments of
 $15.0 million beginning
 in 2003, with final
 payment in 2011..............   $146.4      $150.9       $135.2      $135.1
7% debentures due 2014........     90.9       104.1         98.9        98.7
6.75% notes due 2006..........     98.5       103.8         99.6        99.5
6.5% notes due 2008...........     94.1       102.0         98.9        98.8
6.3% debentures due 2011......    203.4       204.6        200.9       200.9
6% notes due 2004.............     97.1       100.1         99.6        99.6
5.99% debentures due 2010.....    205.3       205.0        202.7       203.0
Other.........................     10.4        16.9         10.4        16.9
                                --------    --------     --------    --------
                                 $946.1      $987.4        946.2       952.5
                                ========    ========
Less current maturities                                    203.7         8.0
                                                         --------    --------
                                                          $742.5      $944.5
                                                         ========    ========
</TABLE>


In January 1998, the Company issued $200 million aggregate principal
amount of notes maturing January 14, 2010.  The notes bear interest at
5.99 percent until January 14, 2000, at which time the interest rate
will be reset at a fixed annual rate of 5.64 percent plus the
Company's then incremental borrowing rate above the rate quoted on
U.S. Treasury ten-year notes.  The notes are redeemable at the
election of the holder, in whole but not in part, at 100 percent of
the principal amount on January 14, 2000.  These notes have been
classified as short-term at June 30, 1999.

In March 1998, the Company issued $200 million aggregate principal
amount of notes maturing March 15, 2011.  The notes bear interest at
6.3 percent until March 15, 2001, at which time the interest rate will
be reset at a fixed annual rate of 5.6219 percent plus the Company's
then incremental borrowing rate above the rate quoted on U.S. Treasury
ten-year notes.  The notes are redeemable at the election of the
holder, in whole but not in part, at 100 percent of the principal
amount on March 15, 2001.  In conjunction with this issue, the Company
entered into an interest rate swap transaction whereby the effective
periodic interest payment is equal to three-month LIBOR plus .3419
percent.  The rate is adjusted every three months starting June 15,
1998.  The swap contract expires on March 15, 2001.

Proceeds of both of the above transactions were used to repay
commercial paper borrowings.

Maturities of long-term debt for the next five years are: 2000-$203.7
million; 2001-$200.5 million; 2002-$1.4 million; 2003-$15.5 million;
and 2004-$115.5 million.  The 9.875 percent debentures are redeemable
at the option of Mallinckrodt at 100 percent in 2001 and thereafter.

NOTE 14 - PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

The changes in benefit obligations and plan assets in 1999 and 1998,
and the funded status and amounts recognized in the Consolidated
Balance Sheets at June 30, 1999 and 1998 for U.S. and significant
non-U.S. defined benefit pension plans and U.S. postretirement
healthcare benefit plans follow (in millions):

<TABLE>
<CAPTION>

                                                             1999
                                              ---------------------------------
                                                Pension Benefits
                                              --------------------      Other
                                                U.S.      Non-U.S.    Benefits
                                              --------    --------    ---------
<S>                                           <C>         <C>         <C>
Benefit obligation at beginning of year....    $461.6      $65.9       $137.6
Service cost...............................      17.6        4.5          3.4
Interest cost..............................      30.5        4.0          9.4
Plan participants' contributions...........                   .7
Plan amendments............................       4.7        1.2         (5.0)
Net actuarial (gain)/loss..................     (51.9)       7.3         (5.7)
Foreign currency exchange rate changes.....                 (3.3)
Benefits paid..............................     (61.9)      (1.3)       (13.7)
Business combinations......................
Curtailments...............................       (.2)
Special termination benefits...............       2.3
                                               -------     ------      -------
Benefit obligation at end of year..........     402.7       79.0        126.0
                                               -------     ------      -------

Fair value of plan assets at beginning
 of year...................................     390.9       46.0
Actual return on plan assets...............      18.2        8.2
Foreign currency exchange rate changes.....                 (2.7)
Employer contributions.....................      26.5        6.4         13.7
Plan participants' contributions...........                   .7
Benefits and expenses paid.................     (64.9)      (1.5)       (13.7)
Business combinations......................
                                               -------     ------      -------
Fair value of plan assets at end of year...     370.7       57.1
                                               -------     ------      -------

Benefit obligation in excess of
 plan assets...............................      32.0       21.9        126.0
Unrecognized prior service cost............     (10.8)      (1.8)        18.9
Unrecognized transition
 asset/(obligation)........................      (1.1)       (.1)
Unrecognized net actuarial
 gain/(loss)...............................      38.4       (4.4)        21.6
                                               -------     ------      -------
Accrued benefit liability..................    $ 58.5      $15.6       $166.5
                                               =======     ======      =======

<CAPTION>
                                                             1998
                                              ---------------------------------
                                                Pension Benefits
                                              --------------------      Other
                                                U.S.      Non-U.S.    Benefits

                                              --------    --------    ---------
<S>                                           <C>         <C>         <C>
Benefit obligation at beginning of year....    $405.4      $50.9       $125.9
Service cost...............................      15.9        5.3          3.1
Interest cost..............................      31.4        3.4         10.0
Plan participants' contributions...........                   .5           .2
Plan amendments............................        .1         .1
Net actuarial (gain)/loss..................      75.0        3.6          2.6
Foreign currency exchange rate changes.....                 (2.0)
Benefits paid..............................     (78.9)       (.9)        (3.7)
Business combinations......................       5.1        5.3           .9
Curtailments...............................       (.2)       (.3)        (1.4)
Special termination benefits...............       7.8
                                               -------     ------      -------
Benefit obligation at end of year..........     461.6       65.9        137.6
                                               -------     ------      -------

Fair value of plan assets at beginning
 of year...................................     355.8       35.6
Actual return on plan assets...............     104.8        5.3
Foreign currency exchange rate changes.....                 (1.5)
Employer contributions.....................      12.2        2.6          3.5
Plan participants' contributions...........                   .5           .2
Benefits and expenses paid.................     (81.9)      (1.0)        (3.7)
Business combinations......................                  4.5
                                               -------     ------      -------
Fair value of plan assets at end of year...     390.9       46.0
                                               -------     ------      -------

Benefit obligation in excess of
 plan assets...............................      70.7       19.9        137.6
Unrecognized prior service cost............      (7.4)       (.7)        15.4
Unrecognized transition
 asset/(obligation)........................      (2.2)       (.8)
Unrecognized net actuarial
 gain/(loss)...............................       5.3       (1.0)        16.2
                                               -------     ------      -------
Accrued benefit liability..................    $ 66.4      $17.4       $169.2
                                               =======     ======      =======

</TABLE>

The aggregate projected benefit obligation, aggregate accumulated
benefit obligation, and aggregate fair value of plan assets for the
pension plans with accumulated benefit obligations in excess of plan
assets were $98.1 million, $84.5 million and $45.3 million,
respectively, as of June 30, 1999, and $65.6 million, $53.7 million
and $9.7 million, respectively, as of June 30, 1998.

The components of net periodic defined benefit pension costs and net
periodic U.S. postretirement healthcare benefit costs are as follows
(in millions):

<TABLE>
<CAPTION>

                                                             1999
                                              ---------------------------------
                                                Pension Benefits
                                              --------------------     Other
                                                U.S.      Non-U.S.    Benefits
                                              --------    --------    ---------
<S>                                           <C>         <C>         <C>
Service cost...............................    $17.6       $ 4.5       $ 3.4
Interest cost..............................     30.5         4.0         9.4
Expected return on plan assets.............    (33.7)       (3.6)
Amortization of prior service cost.........      1.2          .1        (1.5)
Amortization of transition
(asset)/obligation.........................       .9          .1
Recognized net actuarial (gain)/loss.......      (.2)        (.1)        (.2)
Curtailments...............................
Special termination benefits...............      2.3
                                               ------      ------      ------
Net periodic benefit costs.................    $18.6       $ 5.0       $11.1
                                               ======      ======      ======

<CAPTION>
                                                             1998
                                              ---------------------------------
                                                Pension Benefits
                                              --------------------     Other
                                                U.S.      Non-U.S.    Benefits
                                              --------    --------    ---------
<S>                                           <C>         <C>         <C>
Service cost...............................    $15.9       $ 5.3       $ 3.1
Interest cost..............................     31.4         3.4        10.0
Expected return on plan assets.............    (32.6)       (2.8)
Amortization of prior service cost.........      1.2          .1        (1.4)
Amortization of transition
 (asset)/obligation........................       .9          .1
Recognized net actuarial (gain)/loss.......      (.3)        (.1)        (.4)
Curtailments...............................      (.1)        (.2)       (1.4)
Special termination benefits...............      7.8
                                               ------      ------      ------
Net periodic benefit costs.................    $24.2       $ 5.8       $ 9.9
                                               ======      ======      ======

<CAPTION>
                                                             1997
                                              ---------------------------------
                                                Pension Benefits
                                              --------------------     Other
                                                U.S.      Non-U.S.    Benefits
                                              --------    --------    ---------
<S>                                           <C>         <C>         <C>
Service cost...............................    $20.8       $ 3.3       $ 5.2
Interest cost..............................     32.9         2.9        11.6
Expected return on plan assets.............    (31.4)       (2.1)
Amortization of prior service cost.........      1.9          .1          .2
Amortization of transition
 (asset)/obligation........................      1.2          .1
Recognized net actuarial (gain)/loss.......      1.0         (.1)
Curtailments...............................       .8                    (1.3)
Special termination benefits...............      7.2
                                               ------      ------      ------
Net periodic benefit costs.................    $34.4       $ 4.2       $15.7
                                               ======      ======      ======
</TABLE>

Included above and relating to the sale of the chemical additives
business in 1999, and included in the gain on sale recorded in
discontinued operations in 1999, are special termination benefits of
$.1 million and a $.2 million curtailment loss relating to U.S.
defined benefit pension plans.  Included above and relating to the
sale of the catalyst business in 1998, and included in the gain on
sale recorded in discontinued operations in 1998, are special
termination benefits of $1.2 million, a $.2 million curtailment gain
relating to a non-U.S. defined benefit pension plan, and a $1.4
million curtailment gain relating to U.S. postretirement healthcare
benefit plans.  Included above and relating to the sale of the animal
health segment in 1997, and included in the loss on sale recorded in
discontinued operations in 1997, are special termination benefits of
$6.2 million, a $.8 million curtailment loss relating to U.S. defined
benefit pension plans, and a $1.3 million curtailment gain relating to
U.S. postretirement healthcare benefit plans.  Special termination
benefits include charges relating to employee headcount reduction
programs in 1999, 1998 and 1997 of $2.2 million, $6.3 million and $1.0
million, respectively.

The weighted-average assumptions as of each year end used in
accounting for the defined benefit pension plans and the U.S.
postretirement healthcare benefit plans follow:

<TABLE>
<CAPTION>

                                                        JUNE 30, 1999
                                              ---------------------------------
                                                Pension Benefits
                                              --------------------     Other
                                                U.S.      Non-U.S.    Benefits
                                              --------    --------    ---------
<S>                                           <C>         <C>         <C>
Discount rate..............................    7.25%       5.10%       7.25%
Expected long-term rate of return
 on plan assets............................    9.50%       6.29%
Compensation increase rate.................    4.54%       2.85%       5.00%

<CAPTION>
                                                        JUNE 30, 1998
                                              ---------------------------------
                                                Pension Benefits
                                              --------------------     Other
                                                U.S.      Non-U.S.    Benefits
                                             --------    --------    ---------
<S>                                          <C>         <C>         <C>
Discount rate..............................    7.00%       5.69%       7.00%
Expected long-term rate of return
 on plan assets............................    9.50%       6.76%
Compensation increase rate.................    4.50%       2.97%       5.00%

<CAPTION>
                                                        JUNE 30, 1997
                                              ---------------------------------
                                                Pension Benefits
                                              --------------------     Other
                                                U.S.      Non-U.S.    Benefits
                                             --------    --------    ---------
<S>                                          <C>         <C>         <C>
Discount rate..............................    8.00%       6.47%       8.00%
Expected long-term rate of return
 on plan assets............................    9.50%       7.21%
Compensation increase rate.................    5.00%       3.15%       5.00%

</TABLE>

For measurement purposes, annual rates of increase in the per capita
cost of covered healthcare benefits of 7.5 percent and 8.0 percent
were assumed for 2000 and 1999, respectively, gradually declining to
4.75 percent for 2006 and thereafter.  Assumed healthcare cost trend
rates have a significant effect on the amounts reported for the
healthcare plans for retired employees.  A one-percentage-point change
in assumed healthcare cost trend rates would have the following
effects on 1999 service and interest cost and the accumulated
postretirement benefit obligation at June 30, 1999 (in millions):

<TABLE>
<CAPTION>

                                           One-Percentage-     One-Percentage-
                                            Point Increase      Point Decrease
                                           ---------------     ----------------
<S>                                        <C>                 <C>
Effect on total of service and
 interest cost components of net
 periodic postretirement healthcare
 benefit costs...........................        $1.2               $(1.1)
Effect on accumulated postretirement
 benefit obligation for healthcare
 benefits................................         9.8                (8.9)

</TABLE>

The net actuarial gain/loss in excess of 10% of the greater of the
benefit obligation and the fair value of plan assets, the prior
service cost and the transition asset/obligation are being amortized
on a straight-line basis over the average remaining service period of
active participants at the date established.

Defined contribution pension and investment plan expense for 1999,
1998 and 1997 was $12.1 million, $12.6 million and $12.5 million,
respectively.  Expenses related to the plans consist primarily of
Company contributions, which include discretionary amounts determined
on an annual basis for certain investment plans.

The pension and postretirement healthcare benefit plan information
presented above includes related amounts for the businesses sold in
1999, 1998 and 1997, except for 1997 pension expense, assets and
liabilities of non-U.S. animal health segment pension plans and the
accrued postretirement benefit cost of certain active animal health
segment employees which were assumed by the buyer.  Mallinckrodt
retained all pension assets and liabilities relating to the frozen
pension benefits of U.S. employees of the businesses sold in 1999,
1998 and 1997.

NOTE 15 - COMPREHENSIVE INCOME

The accumulated balances, net of taxes, related to each component of
other comprehensive loss were as follows:

<TABLE>
<CAPTION>
                                                                 Accumulated
                                    Foreign       Unrealized         Other
                                    Currency     Gains (Losses)  Comprehensive
                                   Translation   on Securities       Loss
                                   -----------   --------------  -------------
<S>                                <C>           <C>             <C>
Balance at June 30, 1996........    $(14.8)         $ (.5)          $ (15.3)
Other comprehensive
 income (loss)..................     (35.2)            .6             (34.6)
                                    -------         ------          --------
Balance at June 30, 1997........     (50.0)            .1             (49.9)
Other comprehensive loss........     (21.1)          (1.6)            (22.7)
                                    -------         ------          --------
Balance at June 30, 1998........     (71.1)          (1.5)            (72.6)
Other comprehensive loss........     (28.7)          (3.8)            (32.5)
                                    -------         ------          --------
Balance at June 30, 1999........    $(99.8)         $(5.3)          $(105.1)
                                    =======         ======          ========
</TABLE>

The foreign currency translation adjustments are not adjusted for
income taxes as they relate to indefinite investments in non-U.S.
subsidiaries.  The change in foreign currency translation during 1997
was net of a $9.3 million translation loss included in discontinued
operations and related to the divestiture of Fries & Fries, Inc. and
the sale of the animal health segment.

The change in unrealized gains (losses) on securities during 1998
included reclassification adjustments of $.2 million of losses
realized from the sale of securities with no tax benefit.  The tax
effects on the components of other comprehensive income (loss) for
1999, 1998 and 1997 were benefits of $2.3 million, $.9 million and
zero, respectively.

NOTE 16 - CAPITAL STOCK

The Company has authorized and issued 100,000 shares, 98,330
outstanding at June 30, 1999, of par value $100, 4 percent cumulative
preferred stock.  This stock, with voting rights, is redeemable at the
Company's option at $110 per share.  During the three years ended June
30, 1999, the number of issued and outstanding shares did not change.
The Company has authorized 1,400,000 shares, par value $1, of series
preferred stock, none of which was outstanding during the three years
ended June 30, 1999.

In February 1999, the Company's Board of Directors approved the
redemption of the Company's non-voting common stock purchase rights at
the redemption price of five cents per right effective March 15, 1999.

The Company has 9,114,393 common shares reserved at June 30, 1999 for
exercise of stock options and granting of stock awards.

The Company's Board of Directors previously authorized repurchase of
47 million shares of common stock and additional repurchases not to
exceed cash outlays of $250 million.  Share repurchases under these
authorizations have totaled 39.8 million shares.  Changes in the
number of shares of common stock issued and in treasury were as
follows:

<TABLE>
<CAPTION



                                          1999          1998          1997
                                       ----------    ----------    ----------
<S>                                    <C>           <C>           <C>
Common stock issued..............      87,124,773    87,124,773    87,124,773
Treasury common stock:
  Balance, beginning of year.....      13,950,122    14,852,331    12,844,205
  Stock options exercised........        (244,019)     (614,320)   (1,143,868)
  Purchased......................       2,955,200       241,753     3,654,995
  Issuance of stock related to
   an acquisition................                                    (503,001)
  Stock awards...................          (7,806)     (256,903)
  401(k) employer matching
   contribution..................        (231,413)     (272,739)
                                       -----------   -----------   -----------
  Balance, end of year...........      16,422,084    13,950,122    14,852,331
                                       -----------   -----------   -----------
Common stock outstanding,
 end of year.....................      70,702,689    73,174,651    72,272,442
                                       ===========   ===========   ===========
</TABLE>

NOTE 17 - STOCK PLANS

The Company authorized a new non-qualified stock option plan in
October 1997.  This plan provides for granting stock options at prices
not less than 100 percent of market price (as defined) at the date of
grant.  Options are exercisable over nine years beginning one year
after the date of grant and are limited for the first and second year
of eligibility to 33-1/3 percent and 66-2/3 percent, respectively.
Options granted under previous non-qualified stock option plans are
exercisable over nine years beginning one year after the date of grant
and are limited to 50 percent during the first year of eligibility.

The pro forma information regarding net earnings and earnings per
share required by SFAS 123 has been determined as if the Company had
accounted for its employee stock options under the fair value method.
The fair value for these options was estimated at the date of grant
using the Black-Scholes option pricing model with the following
weighted-average assumptions:

                                         1999       1998      1997
                                        ------     ------    ------
Risk free interest rate..............    5.75%      5.95%     6.32%
Expected dividend yield of stock.....    1.84%      1.58%     1.53%
Expected volatility of stock.........    22.3%      23.8%     25.4%
Expected life of option (years)......     4.6        4.6       4.5

The weighted-average fair values of options granted during 1999, 1998
and 1997 were $6.35, $9.39 and $11.09, respectively.

The estimated fair value of the options is amortized to expense over
the options' vesting period.  The Company's pro forma information
follows (in millions, except per share amounts):

                                         1999       1998       1997
                                       --------   --------   --------
Net earnings (loss):
 As reported........................    $196.2    $(204.4)    $190.1
 Pro forma..........................     187.1     (215.3)     183.6
Earnings (loss) per share:
 As reported........................    $ 2.72    $ (2.81)    $ 2.53
 Pro forma..........................      2.60      (2.96)      2.44

A summary of the Company's stock option activity and related
information follows:

<TABLE>
<CAPTION>

                                                          1999
                                              ----------------------------
                                                Number      Weighted-Avg.
                                              of Options    Exercise Price
                                              ----------    --------------
<S>                                           <C>           <C>
Outstanding-beginning of year..............    7,218,226        $34.04
Granted....................................    1,921,417         26.28
Exercised..................................     (244,019)        21.17
Canceled...................................     (782,495)        35.95
                                              -----------
Outstanding-end of year....................    8,113,129         32.49
                                              ===========
Exercisable at end of year.................    5,265,282         34.04
Reserved for future option grants..........      933,984


<CAPTION>                                                 1998
                                              ----------------------------
                                                Number      Weighted-Avg.
                                              of Options    Exercise Price
                                              ----------    --------------
<S>                                           <C>           <C>
Outstanding-beginning of year..............    5,821,316        $32.96
Granted....................................    2,601,227         35.68
Exercised..................................     (614,320)        29.40
Canceled...................................     (589,997)        35.44
                                              -----------
Outstanding-end of year....................    7,218,226         34.04
                                              ===========
Exercisable at end of year.................    4,394,493         32.64
Reserved for future option grants..........    2,768,000

<CAPTION>
                                                          1997
                                              ----------------------------
                                                Number      Weighted-Avg.
                                              of Options    Exercise Price
                                              ----------    --------------
<S>                                           <C>           <C>
Outstanding-beginning of year..............    6,262,753        $31.54
Granted....................................    1,118,170         38.54
Exercised..................................   (1,143,868)        29.60
Canceled..................................      (415,739)        35.77
                                              -----------
Outstanding-end of year...................     5,821,316         32.96
                                              ===========
Exercisable at end of year................     4,275,547         31.40
Reserved for future option grants.........     1,939,615

</TABLE>

Outstanding stock options will expire over a period ending no later
than June 14, 2009.  The average exercise price of outstanding stock
options at June 30, 1999 was based on an aggregate exercise price of
approximately $264 million.  The weighted-average remaining
contractual life of outstanding stock options is 6.6 years.  Further
breakdown of outstanding stock options by price range follows:

                       Options Currently Outstanding
                -----------------------------------------------
                   Number      Weighted-Avg.     Weighted-Avg.
  Price Range    of Options    Exercise Price    Remaining Life
--------------  -----------    --------------    --------------
$16.16 - 29.98   2,865,879        $26.13              7.01
$30.13 - 34.79   1,176,773         33.64              5.89
$35.01 - 44.47   4,070,477         36.63              6.55

                     Options Exercisable
                 ----------------------------
                   Number      Weighted-Avg.
  Price Range    of Options    Exercise Price
--------------  -----------    --------------
$16.16 - 29.98   1,112,096        $26.42
$30.13 - 34.79   1,077,673         33.79
$35.01 - 44.47   3,075,513         36.88

NOTE 18 - BUSINESS SEGMENT AND GEOGRAPHICAL DATA

Upon adoption of SFAS 131, the Company segregated its operations into
three reportable segments:  Respiratory, Imaging and Pharmaceuticals.
The Company's reportable segments are business units that offer
different products and services and are managed separately, because
each business requires different manufacturing, technology and
marketing strategies.

The Respiratory segment develops, manufactures and sells products that
help diagnose, monitor and treat respiratory disorders.  Respiratory
products include anesthesia and respiratory devices; oximetry,
including monitors and sensors; critical care and portable
ventilators; medical gas, oxygen therapy and asthma management; sleep
diagnostic and therapy; blood analysis products; and maintenance
services.  The Respiratory segment's products are purchased for use
throughout the hospital, including intermediate care and step-down
units, labor and delivery rooms, emergency rooms and general care
floors, and are marketed and sold into the alternate site care market,
including surgicenters, subacute care and skilled nursing facilities,
physicians' offices, clinics, ambulatory care settings, and the
growing home market.  These products are sold in the major markets of
the world principally through a direct sales force, assisted by
clinical consultants and specialists, corporate account managers, and
distributors in the United States and internationally.

The Imaging segment manufactures, sells and distributes products used
in radiology, cardiology and nuclear medicine.  Radiology and
cardiology products include x-ray contrast media (ionic and nonionic),
ultrasound contrast agents, magnetic resonance imaging (MRI) agents,
and catheters for use in diagnosis and therapy.  These products are
marketed throughout the world through a direct sales force and
distributors.  Nuclear medicine products consist of
radiopharmaceuticals used to provide images of numerous body organs,
anatomy and function, and to diagnose and treat diseases.  Nuclear
medicine products are sold in the U.S. by a direct sales force and
distributed both directly and through a nationwide network of nuclear
pharmacies.  Internationally, nuclear medicine products are marketed
through a direct sales force and distributors.

The Pharmaceuticals segment includes analgesics such as acetaminophen
(APAP) used to control pain and fever; codeine salts, morphine and
other opium based narcotics and synthetic narcotics used to treat pain
and coughs; and peptides which are used in many new pharmaceuticals.
Other Pharmaceuticals' products include laboratory chemicals used in
analysis and microelectronic chemicals used in the semiconductor
industry; magnesium stearate for use as a tableting aid in
pharmaceuticals; potassium chloride for use as a potassium supplement
in pharmaceuticals and nutritionals; and other salts, chemicals and
reagents used in the production of pharmaceutical and food products.
The Pharmaceuticals products are sold primarily through distributors
and by a direct sales force to the pharmaceutical industry for use in
the manufacture of dosage form drugs.  Narcotic prescription chemicals
are sold directly to pharmaceutical manufacturers, and pharmaceutical
dosage products are sold directly to drug wholesalers and chain
pharmacies, while opiate addiction products are sold primarily to
clinics.  Laboratory chemical products, which include thousands of
high-purity reagent chemicals used in research and development and
analytical laboratories, are sold primarily through distributors to
medical, industrial, educational and governmental laboratories.  A
direct sales force is used to offer microelectronic chemicals and
photoresist strippers to semi-conductor chip producers worldwide.

The Company evaluates performance and allocates resources based upon
operating earnings.  Operating earnings of a business segment
represents revenues less all operating expenses and does not include
interest and corporate expense.  Identifiable segment assets are those
identified as directly attributable to a segment's operations and
primarily include accounts receivable, inventory, property, plant and
equipment, intangible assets and goodwill.

The accounting policies of the reportable segments are the same as
those described in Note 1.

The following information by segment is as of and for the years ended
June 30 (in millions):
<TABLE>
<CAPTION>
                           Respiratory    Imaging    Pharmaceuticals    Total
                           -----------    -------    ---------------  ---------
<S>                        <C>            <C>        <C>              <C>
1999
----
Net sales...............    $1,143.7      $776.4          $661.1       $2,581.2
Depreciation expense....        48.2        41.8            38.1          128.1
Amortization expense....        68.9         8.1             7.5           84.5
Operating earnings......       140.1       119.3           103.3          362.7
Identifiable segment
 assets.................     2,181.0       730.6           668.8        3,580.4
Expenditures for
 property, plant and
 equipment..............        39.5        34.9            41.5          115.9

1998
----
Net sales...............       990.5       760.3           616.2        2,367.0
Depreciation expense....        45.2        34.3            31.9          111.4
Amortization expense....        59.0         9.1             7.2           75.3
Operating earnings......       102.2       123.8            83.2          309.2
Identifiable segment
 assets.................     2,310.0       725.2           643.4        3,678.6
Expenditures for
 property, plant and
 equipment..............        49.7        48.6            41.2          139.5

1997
----
Net sales...............       321.1       801.8           575.2        1,698.1
Depreciation expense....        22.5        32.2            32.5           87.2
Amortization expense....        12.3        10.6             6.8           29.7
Operating earnings......        75.9       163.9            82.4          322.2
Identifiable segment
 assets.................       451.8       750.1           658.7        1,860.6
Expenditures for
 property, plant and
 equipment..............        18.1        39.1            42.9          100.1
</TABLE>

Reconciliations of operating earnings for reportable segments to
earnings from continuing operations before income taxes as reported in
the Consolidated Statements of Operations and a reconciliation of
identifiable segment assets to total assets as reported in the
Consolidated Balance Sheets follow (in millions):

<TABLE>
<CAPTION>

                                         As of and for the Year Ended June 30,
                                         -------------------------------------
                                           1999           1998          1997
                                         --------       --------      --------
<S>                                      <C>            <C>           <C>
Total operating earnings for
 reportable segments.................    $  362.7       $  309.2      $  322.2
Corporate expense....................       (24.8)         (22.9)        (24.7)
Acquisition-related charges..........                     (380.7)
Integration-related charges..........                      (68.6)
                                         ---------      ---------     ---------
Consolidated operating
 earnings (loss).....................       337.9         (163.0)        297.5
Interest and other nonoperating
 income, net.........................         1.5           14.8          22.0
Interest expense.....................       (85.0)        (101.8)        (48.0)
                                         ---------      ---------     ---------
Earnings (loss) from continuing
 operations before income taxes......    $  254.4       $ (250.0)     $  271.5
                                         =========      =========     =========

Identifiable segment assets..........    $3,580.4       $3,678.6      $1,860.6
Other assets.........................        77.0          177.3         990.0
Discontinued operations..............                       17.2         124.8
                                         ---------      ---------     ---------
Total assets.........................    $3,657.4       $3,873.1      $2,975.4
                                         =========      =========     =========

Corporate items not associated
 with identifiable segments:
   Depreciation expense.............     $    2.5       $    2.9      $    3.0
   Expenditures for property,
    plant and equipment.............          1.0            3.2           4.3

</TABLE>

On August 28, 1997, the Company acquired Nellcor.  The acquisition was
accounted for under the purchase method of accounting.  The purchase
price of the Nellcor acquisition was approximately $1.9 billion and
was allocated to the assets acquired and liabilities assumed based
upon generally accepted accounting principles and estimated fair
values at the date of acquisition.  Purchased research and
development, an identifiable intangible asset, of $306.3 million was
charged to continuing operations in the first quarter of 1998.  The
sale of Nellcor inventories, which were stepped up to fair value in
connection with allocation of purchase price, decreased earnings from
continuing operations before income taxes by $74.4 million.  In
addition, the Company recorded pretax integration-related charges of
$68.6 million in 1998.  See Note 2 for additional information.

Net sales in the U.S. based upon location of the customers were $1.74
billion, $1.59 billion and $1.08 billion for 1999, 1998 and 1997,
respectively.  The U.S. represents 68 percent, 67 percent and 64
percent of total net sales for 1999, 1998 and 1997, respectively.  No
other individual country had revenues representing 10 percent or more
of total net sales during this three-year period.

Property, plant and equipment, net located in the U.S. were $676
million, $688 million and $560 million for 1999, 1998 and 1997,
respectively.  The U.S. represents 78 percent, 77 percent and 76
percent of the total property, plant and equipment for 1999, 1998 and
1997, respectively.  No other individual country had property, plant
and equipment, net representing 10 percent or more of this asset
category during this three-year period.

In July 1996, Mallinckrodt began supplying Premier with x-ray contrast
media under a five-year contract.  Subsequently, Mallinckrodt entered
into a sole-source agreement to supply Premier hospital and healthcare
facilities with tracheostomy tubes, temperature monitoring systems,
and radiopharmaceuticals and related products.  Effective July 1,
1997, Premier named Mallinckrodt a corporate partner and, accordingly,
Premier's 1,800 hospital and healthcare facilities are provided
incentives to use Mallinckrodt products.  Effective July 1, 1999, the
corporate agreement was extended through December 31, 2006.  In
addition, the new agreement with the inclusion of Nellcor products now
covers almost all Respiratory and Imaging segment products.  For 1999,
1998 and 1997, net sales to hospital and healthcare facilities under
the Premier agreement represented approximately 13 percent, 13 percent
and 9 percent, respectively, of consolidated net sales.  No individual
customer, either through Premier or otherwise, represented more than
10 percent of net sales for any of the three years in the period ended
June 30, 1999.

NOTE 19 - COMMITMENTS

The Company leases office space, data processing equipment, land,
buildings, and machinery and equipment.  Rent expense for continuing
operations in 1999, 1998 and 1997 related to operating leases was
$32.1 million, $31.5 million and $20.2 million, respectively.  Minimum
rent commitments for continuing operations at June 30, 1999 under
operating leases with an initial or remaining noncancelable period
exceeding one year follow:

<TABLE>
<CAPTION>
                                                              After
(In millions)    2000     2001     2002     2003     2004     2004     Total
                ------   ------   ------   ------   ------   ------   -------
<S>             <C>      <C>      <C>      <C>      <C>      <C>      <C>
                $ 25.0   $ 19.3   $ 14.4   $ 11.2   $ 9.9    $ 33.4   $113.2

</TABLE>

NOTE 20 - CONTINGENCIES

The Company is subject to various investigations, claims and legal
proceedings covering a wide range of matters that arise in the
ordinary course of its business activities.  In one such matter,
German authorities seized certain records of two of the Company's non-
U.S. subsidiaries, Mallinckrodt Medical GmbH and Mallinckrodt
Radiopharma GmbH, in the fall of 1997.  These seizures were part of
investigations of certain practices at these subsidiaries that
involved payments to physicians and other German healthcare providers.
The investigations, which are ongoing, appear to focus on whether the
payments in question were for research or other services performed by
the recipients, or may have been sales incentives or discounts which
could possibly be contrary to German law.

The Company has recognized the costs and associated liabilities only
for those investigations, claims and legal proceedings for which, in
its view, it is probable that liabilities have been incurred and the
related amounts are estimable.  Based upon information currently
available, management believes that existing accrued liabilities are
sufficient and that it is not reasonably possible at this time that
any additional liabilities will result from the resolution of these
matters that would have a material adverse effect on the Company's
consolidated results of operations or financial position.

In connection with laws and regulations pertaining to the protection
of the environment, the Company is a party to several environmental
investigations or remediations and, along with other companies, has
been named a "potentially responsible party" for certain waste
disposal sites.  The Company accrues for losses associated with
environmental remediation obligations when such losses are probable
and reasonably estimable.  Accruals for estimated losses from
environmental remediation obligations generally are recognized no
later than completion of the remedial feasibility study.  Such
accruals are adjusted as further information develops or circumstances
change.  Accruals for future expenditures for environmental
remediation are not discounted to their present value. Recoveries, of
which none exist at June 30, 1999 and 1998, of environmental
remediation costs from other parties are recognized as assets when
their receipt is deemed probable.  The Company previously recognized
the costs associated with the investigation and remediation of
Superfund sites, the litigation of potential environmental claims, and
the investigation and remedial activities at the Company's current and
former operating sites for matters that meet the policy set forth
above.  Related accruals at June 30, 1999 and 1998 of $128.8 million
and $129.2 million, respectively, are included in current accrued
liabilities and other noncurrent liabilities and deferred credits.

<PAGE>

QUARTERLY RESULTS
(In millions, except per share amounts)
<TABLE>
<CAPTION>

FISCAL 1999
                                        Quarter (Unaudited)
                              -------------------------------------
                                First    Second    Third    Fourth      Year
                              --------  --------  -------  --------   ---------
<S>                            <C>       <C>      <C>       <C>       <C>
Net sales..................   $ 591.2    $636.7   $675.0    $678.3    $2,581.2
Gross margins..............     272.9     289.0    315.9     323.5     1,201.3
Earnings from
 continuing operations.....      31.7      35.1     54.1      52.0       172.9
Discontinued operations....      22.6                           .7        23.3
                              --------   -------  -------   -------   ---------
Net earnings...............      54.3      35.1     54.1      52.7       196.2
Preferred stock dividends..       (.1)      (.1)     (.1)      (.1)        (.4)
                              --------   -------  -------   -------   ---------
Available for common
 shareholders..............   $  54.2    $ 35.0   $ 54.0    $ 52.6    $  195.8
                              ========   =======  =======   =======   =========

Basic earnings per common
 share:
  Earnings from
   continuing operations...   $   .43    $  .49   $  .76    $  .73    $   2.41
  Discontinued operations..       .31                          .01         .32
                              --------   -------  -------   -------   ---------
  Net earnings.............   $   .74    $  .49   $  .76    $  .74    $   2.73
                              ========   =======  =======   =======   =========

Diluted earnings per
 common share:
  Earnings from continuing
   operations..............   $   .43    $  .49   $  .75    $  .73    $   2.40
  Discontinued operations..       .31                          .01         .32
                              --------   -------  -------   -------   ---------
  Net earnings.............   $   .74    $  .49   $  .75    $  .74    $   2.72
                              ========   =======  =======   =======   =========

</TABLE>

In June 1998, the Company committed to the sale of the remaining
chemical additives business of the catalysts and chemical additives
division, and closing of the sale occurred on July 31, 1998.  The
transaction resulted in a $37.0 million gain on sale, $23.3 million
net of taxes, which was included in discontinued operations.  Earnings
from operations were zero for the one month of operations.

<PAGE>

QUARTERLY RESULTS
(In millions, except per share amounts)

<TABLE>
<CAPTION>
FISCAL 1998
                                        Quarter (Unaudited)
                              -------------------------------------
                                First    Second    Third    Fourth      Year
                              --------  --------  -------  --------   ---------
<S>                           <C>        <C>      <C>       <C>       <C>
Net sales..................   $ 454.6    $607.3   $649.8    $655.3    $2,367.0
Gross margins..............     178.8     211.5    305.2     302.7       998.2
Earnings (loss) from
 continuing operations.....    (290.9)    (19.4)    31.9      10.0      (268.4)
Discontinued operations....                14.5     (4.0)     61.9        72.4
Cumulative effect of
 accounting change.........      (8.4)                                    (8.4)
                              --------   -------  -------   -------   ---------
Net earnings (loss)........    (299.3)     (4.9)    27.9      71.9      (204.4)
Preferred stock dividends..       (.1)      (.1)     (.1)      (.1)        (.4)
                              --------   -------  -------   -------   ---------
Available for common
 shareholders..............   $(299.4)   $ (5.0)  $ 27.8    $ 71.8    $ (204.8)
                              ========   =======  =======   =======   =========

Basic earnings per common
 share:
  Earnings (loss) from
   continuing operations...   $ (4.02)   $ (.27)  $  .44    $  .13    $  (3.69)
  Discontinued operations..                 .20     (.06)      .85         .99
  Cumulative effect of
   accounting change.......      (.11)                                    (.11)
                              --------   -------  -------   -------   ---------
  Net earnings (loss)......   $ (4.13)   $ (.07)  $  .38    $  .98    $  (2.81)
                              ========   =======  =======   =======   =========

Diluted earnings per
 common share:
  Earnings (loss) from
   continuing operations...   $ (4.02)   $ (.27)  $  .43    $  .13    $  (3.69)
  Discontinued operations..                 .20     (.05)      .85         .99
  Cumulative effect of
   accounting change.......      (.11)                                    (.11)
                              --------   -------  -------   -------   ---------
  Net earnings (loss)......   $ (4.13)   $ (.07)  $  .38    $  .98    $  (2.81)
                              ========   =======  =======   =======   =========
</TABLE>

On August 28, 1997, the Company acquired Nellcor Puritan Bennett
Incorporated (Nellcor) through an agreement to purchase for cash all
of the outstanding shares of common stock of Nellcor for $28.50 per
share.  The aggregate purchase price of the Nellcor acquisition was
approximately $1.9 billion.  Approximately $308.3 million of the
purchase price was allocated to purchased research and development.
This intangible asset, which had no tax benefit, was charged to
results of operations during the first quarter of 1998.  Of the total
charge of $308.3 million, $2.0 million related to the Aero Systems
division which was sold and reclassified to discontinued operations in
the fourth quarter of 1998.

The sale of Nellcor inventories, which were stepped up to fair value
in connection with the allocation of purchase price, decreased
earnings by $75.4 million, $46.7 million net of taxes for 1998.
After-tax charges to the Respiratory segment, which are included in
earnings (loss) from continuing operations, were $11.5 million and
$34.6 million for the first and second quarters, respectively.  After-
tax charges to discontinued operations related to the Aero Systems
division were $.2 million and $.4 million for the first and second
quarters, respectively.

Costs of exiting certain activities related to Mallinckrodt operations
plus integration costs of the combined Mallinckrodt and Nellcor
operations were $68.6 million, $46.4 million net of taxes.  The after-
tax charge increased the loss from continuing operations in the second
quarter by $4.3 million, and reduced earnings from continuing
operations by $8.3 million and $33.8 million in the third and fourth
quarters, respectively.  See the Exit Activities and Restructuring
Charges section of Note 2 of the Notes to Consolidated Financial
Statements for additional disclosure.

The Company sold certain chemical additive product lines in the second
quarter of 1998, and recorded a gain on sale, net of taxes, of $8.7
million.  In the fourth quarter, the Company sold its catalyst
business and Aero Systems division.  The catalyst sale resulted in a
gain, net of taxes, of $60.2 million.  No gain or loss was recognized
on sale of the Aero Systems division.  In June 1998, the Company
committed to the sale of the remaining chemical additives business of
the catalysts and chemical additives division, and closing of the sale
occurred on July 31, 1998.  The net gain on sale of these businesses
and their results of operations were reclassified to discontinued
operations in the fourth quarter of 1998 and previously reported 1998
quarterly financial information was restated at that time.  See the
Discontinued Operations section of Note 2 of the Notes to Consolidated
Financial Statements for additional disclosure.

In the fourth quarter of 1998, the Company elected to early adopt the
provisions of AICPA SOP 98-5, "Reporting on the Costs of Start-Up
Activities" (SOP 98-5), in its financial statements for the year ended
June 30, 1998.  The effect of adoption of SOP 98-5 was to record a
charge of $8.4 million, net of taxes, for the cumulative effect of an
accounting change to expense costs that had previously been
capitalized prior to July 1, 1997.  The approximate effect of the
accounting change for each quarter of the year ended June 30, 1998 was
to increase the net loss $7.7 million or 11 cents per share in the
quarter ended September 30, 1997; reduce the net loss $.6 million or 1
cent per share in the quarter ended December 31, 1997; increase net
earnings $.6 million or 1 cent per share in the quarter ended March
31, 1998; and increase net earnings $.4 million or 1 cent per share in
the quarter ended June 30, 1998.

Net earnings per share for the four quarters of 1998 were less than
full year per share results by three cents due to increases in common
shares outstanding during 1998.

<PAGE>

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
          AND FINANCIAL DISCLOSURE

None.

PART III.

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

For information concerning directors of the registrant, see pages 2
through 7, and 11, incorporated herein by reference, of Mallinckrodt's
definitive Proxy Statement for the Annual Meeting of Stockholders to
be held on October 20, 1999.  For information concerning executive
officers of the registrant, see Part I Item 4 of this report and page
11, incorporated herein by reference, of Mallinckrodt's definitive
Proxy Statement for the Annual Meeting of Stockholders to be held on
October 20, 1999.

ITEM 11.  EXECUTIVE COMPENSATION

For information concerning executive compensation, see pages 6 and 7,
10 and 11, and 19 through 29, incorporated herein by reference, of
Mallinckrodt's definitive Proxy Statement for the Annual Meeting of
Stockholders to be held on October 20, 1999.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

For information concerning security ownership of certain beneficial
owners and management, see pages 8 through 10, incorporated herein by
reference, of Mallinckrodt's definitive Proxy Statement for the Annual
Meeting of Stockholders to be held on October 20, 1999.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

For information concerning certain relationships and related
transactions, see page 7, incorporated herein by reference, of
Mallinckrodt's definitive Proxy Statement for the Annual Meeting of
Stockholders to be held on October 20, 1999.

PART IV.

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
          FORM 8-K

(a)    Financial Statements, Financial Statement Schedules and
       Exhibits

(1)(2) See index on page 63 for a listing of financial statements and
financial statement schedules filed with this report.

(3)    Exhibits filed with this report.

Exhibit
Number                          Description
-------  -------------------------------------------------------------

2.1      Agreement dated February 4, 1997 among Mallinckrodt, Hercules
         Incorporated, Roche Holdings, Inc. and Givaudan-Roure
         (International) SA (incorporated herein by reference to
         Exhibit 2.1 to Form 8-K, dated March 31, 1997)

2.2      First Amendment to Agreement dated March 28, 1997 among
         Mallinckrodt, Hercules Incorporated, Roche Holdings, Inc. and
         Givaudan-Roure (International) SA (incorporated herein by
         reference to Exhibit 2.2 to Form 8-K, dated March 31, 1997)

2.3      Contribution Agreement dated February 4, 1997 among
         Mallinckrodt, Roche Holdings, Inc. and Givaudan-Roure (United
         States) Inc. (incorporated herein by reference to Exhibit 2.3
         to Form 8-K, dated March 31, 1997)

2.4      Stock Purchase Agreement, dated May 19, 1997, among
         Mallinckrodt Inc., Mallinckrodt Veterinary, Inc.,
         Mallinckrodt Veterinary International, Inc. and Schering-
         Plough Corporation (incorporated herein by reference to
         Exhibit 2.1 to Form 8-K, dated June 30, 1997)

2.5      Amendment No. 1 dated June 30, 1997 to the Stock Purchase
         Agreement among Mallinckrodt Inc., Mallinckrodt Veterinary,
         Inc., Mallinckrodt Veterinary International, Inc. and
         Schering-Plough Corporation, which amendment was also
         executed for certain purposes by Mallinckrodt
         Veterinary Holdings, Inc. (incorporated herein by reference
         to Exhibit 2.2 to Form 8-K, dated June 30, 1997)

2.6      Agreement and Plan of Merger, dated as of July 23, 1997,
         among Nellcor Puritan Bennett Incorporated ("Nellcor"),
         Mallinckrodt Inc. and NPB Acquisition Corp. (incorporated
         herein by reference to Nellcor's Current Report on Form 8-K
         (File No. 0-14980) filed on August 5, 1997)

3.1(a)   Restated Certificate of Incorporation of Mallinckrodt, dated
         June 22, 1994 (incorporated herein by reference to Exhibit
         3.1 to 1994 Form 10-K)

3.1(b)   Certificate of Amendment of the Certificate of Incorporation
         of Mallinckrodt, dated October 16, 1996 (incorporated herein
         by reference to Exhibit 3.3 to September 30, 1996 Form 10-Q)

3.1(c)   Certificate of Amendment of the Certificate of Incorporation
         of Mallinckrodt, dated October 30, 1998 (incorporated herein
         by reference to Exhibit 3.1(c) to December 31, 1998 Form 10-
         Q)

3.2      By-Laws of Mallinckrodt as amended through August 17, 1999
         (filed with this electronic submission)

4.1      Form 8-A Registration Statement under Section 12 of the
         Securities Exchange Act of 1934, dated April 10, 1987
         defining the rights of holders of Mallinckrodt's 4%
         Cumulative Preferred Stock and Common Stock
         (incorporated herein by reference to Exhibit 4.6 to 1989 Form
         10-K, Commission File No. 1-483)

4.2      Indenture dated as of March 15, 1985, as amended and restated
         as of February 15, 1995, between Mallinckrodt and First Trust
         of New York, National Association (incorporated herein by
         reference to Exhibit 4.1 to Form S-3 Registration Statement
         No. 33-57821)

4.3      The Company hereby agrees to file on request of the
         Commission a copy of all instruments not otherwise filed with
         respect to long-term debt of the Company or any of its
         subsidiaries for which the total amount of securities
         authorized under such instruments does not exceed 10% of the
         total assets of the Company and its subsidiaries on a
         consolidated basis

10.1     Form of Executive Life Insurance Plan Participation
         Agreement, as entered into with the Company's executive
         officers and certain other key employees (1) (incorporated
         herein by reference to Exhibit 10.24 to 1996 Form 10-K)

10.2     Restated Mallinckrodt Executive Long-Term Disability Plan
         effective January 1, 1987 (1) (incorporated herein by
         reference to Exhibit 10.3 to 1989 Form 10-K, Commission File
         No. 1-483)

10.3(a)  Supplemental Benefit Plan for Participants in the
         Mallinckrodt Retirement Plan as amended and restated
         effective January 1, 1980 (1) (incorporated herein by
         reference to Exhibit 10.6(a) to 1989 Form 10-K, Commission
         File No. 1-483)

10.3(b)  Amendment No. 1 dated June 20, 1989 to Supplemental Benefit
         Plan for Participants in the Retirement Plan for Salaried
         Employees of Mallinckrodt (1) (incorporated herein by
         reference to Exhibit 10.6(b) to 1989 Form 10-K, Commission
         File No. 1-483)

10.3(c)  Amendment No. 2 dated April 20, 1990 to Supplemental Benefit
         Plan for Participants in the Mallinckrodt Retirement Plan (1)
         (incorporated herein by reference to Exhibit 10.6(c) to 1990
         Form 10-K, Commission File No. 1-483)

10.4(a)  Mallinckrodt Supplemental Executive Retirement Plan restated
         effective April 19, 1988 (1) (incorporated herein by
         reference to Exhibit 10.7(a) to 1989 Form 10-K, Commission
         File No. 1-483)

10.4(b)  Amendment No. 1 effective December 6, 1989, to Supplemental
         Executive Retirement Plan (1) (incorporated herein by
         reference to Exhibit 10.7(c) to 1990 Form 10-K, Commission
         File No. 1-483)

10.4(c)  Amendment No. 2 effective April 19, 1996, to Supplemental
         Executive Retirement Plan (1) (incorporated herein by
         reference to Exhibit 10.6(c) to 1996 Form 10-K)

10.5     Supplemental Executive Retirement and Supplemental Life Plan
         of Mallinckrodt Inc. effective July 15, 1984 (1)
         (incorporated herein by reference to Exhibit 10.20 to 1989
         Form 10-K, Commission File No. 1-483)

10.6(a)  Mallinckrodt Management Incentive Compensation Program as
         amended and restated effective July 1, 1991 (1) (incorporated
         herein by reference to Exhibit 10.9(b) to 1991 Form 10-K,
         Commission File No. 1-483)

10.6(b)  Amendment No. 1 to the Management Incentive Compensation
         Plan, effective April 19, 1996 (1) (incorporated herein by
         reference to Exhibit 10.7(b) to 1996 Form 10-K)

10.7(a)  Mallinckrodt 1973 Stock Option and Award Plan as amended
         effective February 21, 1990 (1) (incorporated herein by
         reference to Post-Effective Amendment No. 1 to Form S-8
         Registration Statement No. 33-32109)

10.7(b)  Amendment No. 1 to the Mallinckrodt 1973 Stock Option and
         Award Plan dated June 19, 1991 (1) (incorporated herein by
         reference to Form S-8 Registration Statement No. 33-43925)

10.8(a)  Mallinckrodt 1981 Stock Option Plan as amended through April
         19, 1988 (1) (incorporated herein by reference to Post-
         Effective Amendment No. 3 to Form S-8 Registration Statement
         No. 2-80553)

10.8(b)  Amendment to the 1981 Stock Option Plan effective February
         15, 1989 (1) (incorporated herein by reference to Exhibit
         10.12(b) to 1989 Form 10-K, Commission File No. 1-483)

10.8(c)  Amendment to the 1981 Stock Option Plan effective June 19,
         1991 (1) (incorporated herein by reference to Exhibit
         10.12(c) to 1991 Form 10-K, Commission File No. 1-483)

10.9(a)  Management Compensation and Benefit Assurance Program (1)
         (incorporated herein by reference to Exhibit 10.30 to 1988
         Form 10-K, Commission File No. 1-483)

10.9(b)  Amendments to Management Compensation and Benefit Assurance
         Program (1) (incorporated herein by reference to Exhibit
         10.12(b) to 1996 Form 10-K)

10.10    Agreement of Trust dated August 16, 1996, between
         Mallinckrodt and Wachovia Bank of North Carolina, N.A. (1)
         (incorporated herein by reference to Exhibit 10.13 to 1996
         Form 10-K)

10.11(a) Corporate Staff Employee Severance and Benefit Assurance
         Policy (1) (incorporated herein by reference to Exhibit 10.33
         to 1988 Form 10-K, Commission File No. 1-483)

10.11(b) Mallinckrodt Inc. Corporate Staff Change in Control Severance
         Plan (1) (incorporated herein by reference to Exhibit
         10.14(b) to 1996 Form 10-K)

10.12    Form of Severance Agreement, as entered into with the
         Company's executive officers and certain other key employees
         (1) (incorporated herein by reference to Exhibit 10.23 to
         1996 Form 10-K)

10.13    Mallinckrodt Directors Retirement Services Plan as amended
         and restated effective April 21, 1993 (1) (incorporated
         herein by reference to Exhibit 10.10 to 1993 Form 10-K)

10.14    Mallinckrodt Directors' Stock Option Plan effective October
         17, 1990 (1) (incorporated herein by reference to Exhibit
         4(a) to Form S-8 Registration Statement No. 33-40246)

10.15    Consulting Agreement with Ronald G. Evens, M.D., for the
         period from August 1, 1998 through December 31, 1999 (1)
         (filed with this electronic submission)

10.16(a) Deferral Election Plan for Non-Employee Directors, effective
         June 30, 1994 (1) (incorporated herein by reference to
         Exhibit 10.29 to 1994 Form 10-K)

10.16(b) Amendment of Deferral Election Plan for Non-Employee
         Directors, effective February 15, 1995 (1) (incorporated
         herein by reference to Exhibit 10.22(b) to 1995 Form 10-K)

10.17    Directors Stock Award Plan of Mallinckrodt Inc., effective
         October 15, 1997 (1) (incorporated herein by reference to
         Appendix A to Definitive Proxy Statement (Schedule 14A) for
         the Company's 1997 Annual Meeting of Stockholders, filed with
         the Commission on September 12, 1997)

10.18    The Mallinckrodt Inc. Equity Incentive Plan, effective April
         16, 1997 (1) (incorporated herein by reference to Appendix B
         to Definitive Proxy Statement (Schedule 14A) for the
         Company's 1997 Annual Meeting of Stockholders, filed with the
         Commission on September 12, 1997)

10.19    Executive Incentive Compensation Plan for fiscal 1999 (1)
         (incorporated herein by reference to Exhibit 10.29 to
         September 30, 1998 Form 10-Q)

10.20    Executive Incentive Compensation Plan for fiscal 2000 (1)
         (filed with this electronic submission)

10.21    Amended and Restated Credit Agreement dated as of September
         12, 1997, among Mallinckrodt, the Banks listed therein,
         Morgan Guaranty Trust Company of New York, as Administration
         Agent, Goldman Sachs Credit Partners L.P. and Citibank, N.A.
         as Co-Syndication Agents, and Citibank, N.A., Goldman Sachs
         Credit Partners L.P., and NationsBank, N.A., as Co-
         Documentation Agents (incorporated herein by reference to
         Exhibit 10.24 to September 30, 1997 Form 10-Q)

21       Subsidiaries of the Registrant (filed with this electronic
         submission)

23.1     Consent of Ernst & Young LLP (filed with this electronic
         submission)

27       Financial data schedule for the year ended June 30, 1999
         (filed with this electronic submission)
--------------------------------------
(1)      Management contract or compensatory plan required to be filed
         pursuant to Item 601 of Regulation S-K.

(b)      Reports on Form 8-K

During the quarter and through the date of this report, the following
reports on Form 8-K were filed.

-  Report dated April 29, 1999 under Item 5 regarding the transfer of
   the manufacture of OPTISON* from Molecular Biosystems, Inc. (MBI)
   to Mallinckrodt, and the extension of Mallinckrodt's responsibility
   for funding clinical trials.

-  Report dated May 18, 1999 under Item 5 regarding Mallinckrodt
   outlook for fiscal 2000.

-  Report dated June 17, 1999 under Item 5 regarding Mallinckrodt's
   victory in patent litigation appeal involving the patient warming
   business.

-  Report dated June 22, 1999 under Item 5 regarding Board of
   Directors approval of amended Company bylaws.

-  Report dated July 22, 1999 under Item 5 regarding Mallinckrodt and
   Premier Purchasing Partnership signing new corporate agreement.

-  Report dated August 19, 1999 under Item 5 regarding Board of
   Directors approval of amended Company bylaws.

<PAGE>

INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                                                             Page
                                                            ------
Consolidated Balance Sheets at June 30, 1999 and 1998....     36
For the years ended June 30, 1999, 1998 and 1997:
  Consolidated Statements of Operations..................     35
  Consolidated Statements of Cash Flows........ .........     37
  Consolidated Statements of Changes in
   Shareholders' Equity..................................     38
Notes to Consolidated Financial Statements...............   39-56
Quarterly Results........................................   57-58

--------------------

All other schedules are omitted as the required information is not
present in sufficient amounts or the required information is included
in the consolidated financial statements or notes thereto.

Financial statements and schedules and summarized financial
information of 50 percent or less owned entities are omitted, as none
of such entities are individually or in the aggregate significant
under the tests specified in Regulation S-X under Article 3-09 of
General Instructions as to Financial Statements.

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.



     Mallinckrodt  Inc.
----------------------------
         Registrant

By: /s/ MICHAEL A. ROCCA          By: /s/ DOUGLAS A. MCKINNEY
   -------------------------          --------------------------
        Michael A. Rocca                  Douglas A. McKinney
   Senior Vice President and          Vice President and Controller
   Chief Financial Officer

Date:  September 3, 1999

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated:

Signature                  Title                     Date
---------                  -----                     ----

/s/ C. RAY HOLMAN        Chief Executive Officer    September 3, 1999
-----------------------   and Director
    C. Ray Holman


/s/ MICHAEL A. ROCCA     Senior Vice President and  September 3, 1999
-----------------------   Chief Financial Officer
    Michael A. Rocca


/s/ DOUGLAS A. MCKINNEY  Vice President and         September 3, 1999
                           Controller
-----------------------  (Chief Accounting Officer)
    Douglas A. McKinney


/s/ RAYMOND F. BENTELE         Director             September 3, 1999
-----------------------
    Raymond F. Bentele


/s/ GARETH C. C. CHANG         Director             September 3, 1999
-----------------------
    Gareth C. C. Chang


/s/ WILLIAM L. DAVIS           Director             September 3, 1999
-----------------------
    William L. Davis


/s/ RONALD G. EVENS            Director             September 3, 1999
-----------------------
    Ronald G. Evens


/s/ ROBERTA S. KARMEL          Director             September 3, 1999
-----------------------
    Roberta S. Karmel


/s/ CLAUDINE B. MALONE         Director             September 3, 1999
-----------------------
    Claudine B. Malone


/s/ BRIAN M. RUSHTON           Director             September 3, 1999
-----------------------
    Brian M. Rushton


/s/ DANIEL R. TOLL             Director             September 3, 1999
-----------------------
    Daniel R. Toll


/s/ ANTHONY VISCUSI            Director             September 3, 1999
-----------------------
    Anthony Viscusi